Today in labor history: Medicare and Medicaid established

The ongoing fight to protect Medicare and Medicaid today from tea party Republican “reforms” is in sharp contrast to the victory of July 30, 1965, when President Lyndon Johnson signed legislation establishing Medicare and Medicaid. It came after decades of struggle, and today the struggle continues.

The movement for national health insurance dates back to the struggles of the Great Depression of the 1920s and ’30s, and the New Deal. It was strongly opposed by the medical establishment, including the American Medical Association. A key turning point, according to historian Peter Corning, came in 1957 when the executive council of the AFL-CIO committed the labor federation to an “all-out battle for government health insurance.”

“Government health insurance was pressed as labor’s number-one legislative priority, and organized labor became the rallying point for all those who favored the measure,” Corning wrote.

Medicare and Medicaid were signed into law in 1965 as an amendment to the Social Security Act of 1935. Medicare provided hospital and medical insurance for Americans age 65 or older. In 1972, eligibility for Medicare was extended to people under 65 with certain disabilities, and people of all ages with kidney disease requiring dialysis or transplant. Medicaid, a state and federally funded program, offers health coverage to low-income people.

Some 19 million people enrolled in Medicare when it went into effect in 1966. By 2010, Medicare provided health insurance to 48 million Americans – 40 million people age 65 and older and 8 million younger people with disabilities. Medicare and Medicaid serve a large population of seniors, sick, disabled, and low-income people, most of whom would be unable to afford health care otherwise. (Article continues after video.)

The AFL-CIO website provides this information on the Republican attacks on Medicare:

Because protecting and improving Medicare is critical to health care cost containment, Republican proposals to pare back Medicare actually would increase overall health care costs. For example, the Republican budget proposal for FY 2012 would replace Medicare with vouchers to purchase private health coverage. According to the Congressional Budget Office, this proposal would result in total health care spending for an average 65-year-old that is nearly 40 percent higher than under the current Medicare program. Out-of-pocket costs for a typical senior would almost double. The result of this proposal would be to simply shift costs onto seniors, not to control costs.

Similarly, the proposal to increase the Medicare eligibility age from 65 to 67 would increase health care costs rather than reduce them. According to a recent study, the additional costs for 65- and 66-year-olds, employers and states would be $11.4 billion if the proposal were effective in 2014, twice as much as the federal government would save. For seniors who no longer qualify for Medicare, the proposal would mean an increase of $3.7 billion in out-of-pocket costs. This proposal, like the voucher proposal, would simply shift costs to seniors and other payers and would do nothing to control costs.

For information on the Affordable Care Act and Medicare, click here.

Photo: Progress Ohio/CC/Flickr

A version of this history note appeared July 30, 2013.