This act was signed into law by President Lyndon Johnson on July 30, 1965, in Independence, MO. It established Medicare, a health insurance program for the elderly, and Medicaid, a health insurance program for the poor.
In 1965, the passage of the Social Security Act Amendments, popularly known
as Medicare, resulted in a basic program of hospital insurance for persons aged
65 and older, and a supplementary medical insurance program to aid the elderly
in paying doctor bills and other health care bills. It was funded by a tax on
the earnings of employees, matched by contributions by employers, and was well
received. In the first three years of the program, nearly 20 million beneficiaries
enrolled in it.
Debate over the program actually began two decades earlier when President Harry
S. Truman sent a message to Congress asking for legislation establishing a national
health insurance plan. At that time, vocal opponents warned of the dangers of
“socialized medicine.” By the end of the Truman’s administration,
he had backed off from a plan of universal coverage, but administrators in the
Social Security system and others began to focus on the idea of a program aimed
at insuring Social Security beneficiaries whose numbers and needs were growing.
The 1950 census showed that the aged population in the United States had grown
from 3 million in 1900 to 12 million in 1950. Two-thirds of older Americans
had incomes of less than $1,000 annually, and only one in eight had health insurance.
Between 1950 and 1963, the aged population grew from about 12 million to 17.5
million, or from 8.1 to 9.4 percent of the U.S. population. At the same time,
the cost of hospital care was rising at a rate of about 6.7 percent a year,
several times the annual increase in the cost of living, and health care costs
were rapidly outpacing growth in the incomes of older Americans.
Private insurers had long considered this illness-prone population a "bad
risk.” A broad debate about the need for a social insurance program to
provide older Americans with reliable health care coverage started within the
Social Security Administration and in Congress. Public hearings were held, and
the House of Representatives considered several proposals, but the debate did
not intensify until 1960, when it became clear that private insurers were becoming
increasingly incapable of providing comprehensive, affordable health care coverage
to the rapidly growing population of older adults. Between 1960 and 1965, the
health coverage debate was a front burner issue in Congress, with dozens of
proposals introduced and testimonies given by representatives of major organizations,
including the American Hospital Association, the American Medical Association,
and the AFL-CIO.
After Congress passed the legislation in the summer of 1965, President Lyndon
Johnson decided to sign the bill with former President Truman at the Truman
Presidential Library in Independence, MO, in order to recognize Truman’s
early effort to establish a national health insurance program. On July 30, 1965,
Air Force One departed for Missouri with the President; Mrs. Johnson; George
Meany, president of the AFL-CIO; Secretary of Health, Education and Welfare
Anthony Celebrezze; Governor John Connally of Texas; 13 U.S. Senators; and 19
U.S. Representatives. President Johnson and his party were met by President
and Mrs. Truman at the Truman Library in Independence. They visited for some
time before moving on to the platform in the auditorium of the library for the
bill signing. After some brief remarks, President Johnson signed into law the
Medicare Social Security Amendments. Johnson gave the first souvenir pen to
Mrs. Truman and the next to President Truman and then the remainder of the pens
to guests on the platform.
