What did Medicare cover in 1965?

Apparently, Obama said, “When Medicare was started, it was a small program.” That’s wrong. Trying to correct Obama’s recounting of history, Paul Krugman writes,

Medicare covered everyone 65 and older right from the beginning, although initially it only provided hospital insurance.

This isn’t right either. It’s not Medicare’s history as I know it. Nor is it what Jon Oberlander and Paul Starr think. Here’s what the former wrote in his book The Political Life of Medicare:

The final Medicare legislation […] combined what were seen as mutually exclusive alternatives, the Johnson administration, AMA, and Republican bills, together into a “three-layer cake” of hospital insurance for the aged (Medicare part A), a voluntary program of physician’s insurance for the elderly (Medicare part B), and [a …] program of federal assistance for state medical services payments for the poor (Medicaid).

For the continuation of that passage and other quotes from Oberlander’s book, see this prior post. Paul Starr recounted the same “three-layer cake” history in his book The Social Transformation of American Medicine.

Krugman should welcome this correction because it strengthens his argument. Obama was way off.

UPDATE: Actually, Medicare was passed in 1965 but coverage didn’t begin until July of 1966. So, strictly speaking, Medicare covered nothing in 1965. But, you know what I mean: when it started, it started BIG.

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