GOVERNMENT HEALTH PROGRAMS

Johnson's Health-Care Program

President Lyndon B. Johnson's Great Society program proposed far-reaching legislation on health care, the backbone of which was the Medicare program. Medicare was enacted in a bill signed in 1965 that extended social-security insurance to cover medical expenses for all citizens over 65 years of age. The program, which went into effect on 1 July 1966, was voluntary, but estimates were that 85-95 percent of those eligible would participate. Funding came from increased payroll taxes.

The Design of Medicare

Medicare has had two different parts since its inception. Part A covers hospitalization, outpatient diagnostic services, home-nursing ser-vices, and nursing-home care. Part B can be added voluntarily to cover doctor's fees and drug costs as well as other incidentals; it cost three dollars per month in 1966. The program was designed to be managed by Blue Cross or a similar organization that would pay hospitals and physicians and bill the government.

The Benefits of Medicare

Hospital stays of up to ninety days were covered, but the patient was required to pay the first forty dollars, plus ten dollars per day for each day over sixty days. Nursing-home care for patients who had been hospitalized was available for one hundred days at a cost to the patient of five dollars for each day over twenty days. Under part B doctors were paid 80 percent of "reasonable and customary fees," as determined by the government. The patient paid the 20 percent difference. Initially, the doctor could charge more than the "reasonable and customary fee" if the physician and patient agreed on the higher amount.

Opposition to the Plan

The AMA and most physicians bitterly opposed the new law, labeling it socialized medicine. Organized medicine suggested vastly increased patient demands, with shortages of physicians, nurses, and other health professionals. Insurance companies also opposed the idea. Consumer groups, unions, and senior-citizen's groups favored the program.

Medicaid: A Plan for the Poor

Medicaid, designed to help states pay for care of the poor, was another Great Society program. It provided federal matching funds for eligible state programs. Medicaid drove health costs up significantly by extending care to many people who previously did not seek it because they were poor. By 1969 the system was already plagued with cost overruns. Administrative tangles were common and well publicized, as were scandals that resulted from news reports of health-care professionals defrauding the system. The government felt that physicians' fees were climbing too quickly, so it froze fee schedules paid under Medicaid. The costs were so high that New York dropped two hundred thou-sand eligible Medicaid recipients by lowering the maximum income participants could earn. Any family of four earning over five thousand dollars a year in 1969 was eliminated. As a result of the fee caps, many doctors refused to accept Medicaid patients. Only forty states had started Medicaid programs by 1969.