The Presidents Who Took Us the Closest to Universal Health Care, Part 2

by Tim Foley

categories: For Profit Insurance, Medicare and Medicaid

Published February 16, 2009 @ 06:06PM PT

We covered Roosevelt, Truman and Kennedy’s attempts to expand health care coverage in part 1.  In the second half of the 20th Century, health care reform saw it’s greatest triumph to date – the creation of Medicare and Medicaid as part of Lyndon Johnson’s “Great Society” – but mostly saw the same arguments, the same fights and the same inevitable failures that have dogged it nearly every time.

Lyndon B. Johnson

What JFK started, LBJ finished.  Even though the two men had been political rivals and not particularly close, Johnson was able to turn the tragedy of Kennedy’s assassination into a national impetus to complete the fallen president’s legislative program.  The earliest success of this drive was the Civil Rights Act of 1964, but Medicare was not far behind.  The main obstacle in Congress was also the man who could make it happen, conservative Democrat Rep. Wilbur Mills, chair of the powerful Ways and Means Committee.  It’s clear he got “the Johnson treatment” for most of 1964—a wave of constant attention combined with good cop/bad cop techniques (when there’s only one cop!) that had served LBJ so well as Majority Leader of the Senate.  While constantly impressing on Wilbur the need for Medicare to be a top priority, Johnson also clearly gave him wide latitude to construct the bill and take the credit.

The real tipping point occurred on Election Day, 1964, when Johnson’s landslide (61% of the vote) and the subsequent Democratic majorities in the House and the Senate brought with it an enormous mandate.  LBJ artfully arranged for the bill amending the Social Security Act to create the Medicare program to be HR 1 in the House and S 1 in the Senate, dramatically illustrating how much of a priority this program was for his administration.  Wilbur, for his part, took the three proposed models of Medicare – a single-payer option where the government would pay for a fixed number of hospital days for the elderly, a more robust program that would allow for physician coverage, and a program where the federal government would give money to the states to each set up their own programs – and created a “layer cake” incorporating all three.  Medicare part A would cover the hospital stays, Medicare part B the physician coverage, and the federal-state partnership would evolve into Medicaid.  Although the deliberations and the legislative language were drawn up in Congress, LBJ’s political fingerprints were all over the pressure that allowed the bill to pass in 1965.

Of course, private insurance and the AMA fought it tooth and nail.  Famously, the AMA recorded a speech by budding conservative icon Ronald Reagan, made an album of it, and had members arrange for house parties to listen to Reagan talk about how socialized medicine would lead to the collapse of our values and our freedom.  But this time, the program’s popularity with the public and the LBJ majority in Congress withstood the assault.  Johnson signed the bill with Harry Truman in attendance at the Truman Presidential Library.  With a stroke of the pen, 19 million elderly citizens now had access to health care.  Oddly enough, the U.S. did not immediately turn communist, forget its values and lose sight of its freedom.  And Medicare remains the single most popular option for coverage in the United States.

Richard Nixon

Medicare and Medicaid were strong programs from the start, and wildly popular – so much so that liberal Democrats in Congress began looking for ways to expand coverage for all Americans, to create “Medicare for All.”  Indeed, when Richard Nixon ran for re-election in 1972, he initially thought his likeliest opponent would be a young Senator who was making expanding health care to every American the cause of his career – Ted Kennedy.  From the point of view of maintaining a political livelihood for his party, Nixon’s decision to tackle universal health care in 1974 made a lot of sense.

Moreover, Nixon’s plan would be a stark contrast to the single-payer plans on the table.  In his 1974 State of the Union address, a key feature that he stressed was that his plan would require no new taxes – certainly not the $80 to $100 million that a Medicare for All program was though to cost.  As he said, “This is the wrong approach. This has been tried abroad, and it has failed. It is not the way we do things here in America.”  Instead, Nixon proposed building on the employer-based insurance system, Medicare and Medicaid.  Those who were not offered benefits by their employer would be eligible for a subsidized public plan with costs shared by the federal and state government – basically, a Medicaid that was subsidized, not free.  More importantly, a minimum level of comprehensive benefits would be established for everyone, regardless of how you were covered.  (It’s worth noting that at the same time, on a parallel track to his Comprehensive Health Insurance Act, Nixon was also giving government support to the creation of HMOs.)

Surprise – there was no outcry of socialized medicine from the AMA or the private insurance industry, since the reform plan would hardly affect them.  Even as the Watergate scandal was unfolding, Ted Kennedy brokered a compromise between the White House and Democrats.  But pressure against the plan came from the left – particularly labor unions – who thought that with a Democrat sure to retake the White House in 1976, they could get a better deal on health care reform then.  Ultimately, time ran out when Nixon resigned on August 8, 1874.

We never got that close to universal health care again.  Some armchair psychology would suggest that the Nixon failure impacted health care beyond his individual plan failing.  An initiative as essential and bold as health care relies on the public’s faith in government to pull it off.  Faith in government had been badly weakened in the 1960s, from the Vietnam War, the culture wars raging at home, and a mounting sense that you just couldn’t trust the people in charge.  The president resigning in shame was another massive blow to our collective psyche – one that it took us years, if not decades, to recover from.

William J. Clinton

When Bill Clinton ran for office, the unofficial three parts of his campaign, famously condensed by strategist James Carville, were “Change vs. more of the same,” “It’s the economy, stupid,” and “Don’t forget about health care.”  Bill Clinton inarguably tackled the first two, with a firm break from the previous administrations, particularly on economic issues.  But, as most know, the third part was unquestionably the biggest debacle of his presidency.

JFK once famously said that “Victory has a thousand fathers, but victory is an orphan.”  Not so the Clinton health care reform push of 1993 and 1994.  Instead, its story is a Freudian overdetermined nightmare of bad process, a misunderstanding of the legislative process, poor timing, unreliable alliances, and super-determined opposition from the Republican party, small businesses and the private insurance industry with its infamous “Harold and Louise” ads.  It’s a long story of epic fail in Washington, and one much better summarized by Ezra Klein than me.  But some trends emerge.  Health care was pushed to the back burner primarily by the economy for most of the first year of the Clinton Administration.  Even though the plan would have funneled most Americans into private HMOs through mandated employer-based coverage, it was demonized as “socialized medicine” and a radical change for everyone that wouldn’t lead to better coverage.  On the progressive side, the same labor unions who hadn’t been able to aggressively push for Truman’s program in the 40s and had helped kill the compromise of the 70s now entered the fray too late to help sway public opinion, and the single-payer movement that had withheld support from the 70s compromise now wouldn’t embrace the Clinton plan.

But after the train wreck, Clinton had a second act in health care.  The State Children’s Health Insurance Program (SCHIP) program was created out of a partnership between Sen. Kennedy and Sen. Orrin Hatch with support from Hillary Clinton.  Signed by President Clinton in 1997, the program used money from tax on tobacco to provide coverage for over 6 million children – the largest increase in coverage since the institution of Medicare and Medicaid.  So there are second acts in politics…

Barack H. Obama

This story has yet to be written, but has started with a lot of promise.  The second bill he signed into law was for the reauthorization and expansion of SCHIP to cover an additional 4 million children.  The Economic Recovery Act just passed in Congress does not extend access (the provision to give temporary eligibility for Medicaid to those who have recently lost their jobs), but came close.  And the Obama Administration’s first budget, due imminently, is already being hyped as demonstrating a major commitment towards making Obama’s pledge to sign a universal health care bill by the end of his first term a reality.  But many of the old fights are looming.  The campaign brought the motto “No to Socialism” back into vogue.  The Republican party clearly sees health care reform as an existential threat to their party – even though Obama’s proposal has more in common with the plan of Richard Nixon than the plan of Harry Truman.  Private insurance companies are as dug in as ever against several possible reforms, including a public competitor modeled on Medicare, competing against there products in an open market.  Drug and medical device companies, who have grown fat with the waste in our system, are already ginning up for a fight.

From FDR to Obama, universal health care has had a consistently bumpy road.  Our last major accomplishment was made by a popular president, riding the crest of an election mandate and majorities in Congress.  We’re not quite at the LBJ in 1964 stage yet, but nor are we Bill Clintin in 1993.  Time will tell if we can finally break through the old arguments to achieve quality, affordable health care for all.