• 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.

    • Er, actually, Austin, the president’s comment was about Medicare. And his point regarding expanded benefits is well taken. Medicare initially only covered the elderly, not the disabled nor end stage renal disease patients, who today probably make up the better part of 1/3 of Medicare’s initial 19 million beneficiaries. And certainly bundled benefits such as Medicare Advantage and the drug benefit are examples of which the president spoke. And, speaking of Medicaid, multiple did not implement a Medicaid program for several years after the 1966 start-up.

      • @George – Still, Medicare covered far more than Krugman suggested and was not small. I’ll have to look into Medicaid start-up timing (got a ref?). There was a predecessor Medicaid-like program. It was not implemented in many states but it existed before 1965.

    • Medicaid politics and policy, 1965-2007
      By David G. Smith, Judith D. Moore Chap3, p69
      The authors state that a dozen states did not initially participate in Medicaid and that another dozen essentially ran it as an extension of the previous indigent care system, something called Kerr-Mills, Of course, some of the same reasons that PPACA is taking so long to be implemented (writing regulations, reviewing state plans, etc.) contributed to the start-up delays.

    • Paul Eggers of NIDDK writes that eligibility for Medicare Part A was expanded to include individuals with End Stage Renal Disease (ESRD) and/or disabilities on July 1, 1973.

      According to the 2009 Annual Data Report of the US Renal Data System, “When Part D costs are excluded, total Part A, B, and C Medicare expenditures were $434.5 billion in 2009, with the ESRD program accounting for 6.7 percent of this spending–a number consistent over many years.” (p.282)