Tough History of Establishing Lyndon B. Johnson's New Medicare Program

“In the hills of eastern Kentucky... I sat next to a father that had 11 children, that had worked 4 days last month, that had made $4 a day and had had to feed those little hungry mouths largely from surplus commodities. And he told me because he believed in the admonition of ‘Love the neighbor as yourself,’ that he had been over and sat up with an 85–year–old man until 4 o’clock the night before the President visited him. Why? Because there was no hospital for him to go to and there were no resources to pay the hospital bill. Situations like that must end in America.” President Lyndon B. Johnson, sharing this encounter with the Amalgamated Clothing Workers at their 50th anniversary convention in NYC May 9, 1964, revealed his compassion for the plight of the elderly and indigent. 

Johnson was keenly aware and sensitive of the toll poverty and illness were having ordinary Americans. His firsthand experience of its devastating impact on his family and community in rural Texas during his youth personalized his mission of providing affordable health care for the nation.

 Previous administrations had failed in their attempts to provide this important safety net. Presidents Franklin D. Roosevelt and Harry S. Truman were unable to garner congressional support, due to opposition from the healthcare industry. The AMA (American Medical Association), an industry interest group, upended their plans, successfully labeling them as “socialized medicine.” In 1962, John F. Kennedy failed to pass healthcare legislation due to opposition from the fiscally conservative Wilbur Mills, the influential Chairman of the House Ways and Means Committee. Presented with such a historically daunting task, Lyndon B. Johnson, who had been the Senate majority leader from 1955 to 1961, would need to draw on his intimate knowledge of the legislative process and political acumen to see the bill through. Bill Moyers, a White House assistant, observed “President Lyndon B. Johnson as he coaxed, cajoled, badgered, buttonholed and maneuvered Congress into enacting Medicare.” President Johnson, against the backdrop of the 1964 election and with his ability to rein in important allies and adversaries, was able to pass the nation’s first national health safety net, Medicare.

The 1964 election was the turning point for passage of Medicare legislation. The campaign revolved around numerous issues, while the public was still grieving JFK’s assassination. On August 27, 1964, speaking before the Democratic National Convention, in which he accepted the nomination, he stated, “So let us here tonight, each of us, all of us, rededicate ourselves to keeping burning the golden torch of promise which John Fitzgerald Kennedy set aflame. And let none of us stop to rest until we have written into the law of the land all the suggestions that made up the John Fitzgerald Kennedy program. And then let us continue to supplement that program with the kind of laws that he would have us write”. LBJ (Lyndon B. Johnson) capitalized on the public’s sympathy in the wake of JFK’s death to push a legislative agenda that he shared with the recently assassinated president.

Johnson campaigned for Medicare as a part of his Great Society agenda. At the 1964 Democratic National Convention, Johnson implored, “Our party and our Nation will continue to extend the hand of compassion and the hand of affection and love to the old and the sick and the hungry. For who among us dares to betray the command: ‘Thou shalt open thine hand--unto thy brother, to thy poor, and to thy needy, in thy land…’ Most Americans want medical care for older citizens. And so do I.” Much of LBJ’s Great Society programs mirrored much of JFK’s vision for a New Frontier. These programs were very popular with older Americans who were the primary beneficiaries of the newly enacted safety net. With the public’s eagerness to stay true to Kennedy’s vision for America, the potential conflict of public opposition was neutralized.

On November 3, 1964, LBJ won a landslide victory over Barry Goldwater. LBJ won “61 percent of the popular vote and 90 percent of the electoral vote.” More importantly, the Democrats would win supermajorities in both chambers of Congress.” “Democrats had a 295-140 majority in the House and” an “68-32 majority in the Senate,” as well as majorities in all Congressional committees. This was a clear mandate for LBJ to pursue his progressive social welfare programs. LBJ told Bill Moyers, “If we can’t get Medicare through now, we don’t deserve what we just won.” House Ways and Means Committee Chairman Mills, a thorn to both JFK and LBJ, torpedoing both their Medicare bills, immediately realized he had no option but to cooperate with the Johnson administration to pass some form of Medicare. This propelled the journey, in which the conflict posed by Mills would soon be averted.

Despite such a decisive victory, opponents of Medicare were mobilizing to defeat it, or at the very least, pass a much weaker bill. Foremost among them were the AMA and insurance companies. Despite having supermajorities in Congress, there was a significant number of fiscally conservative Democrats who could join the Republicans to derail the bill. LBJ was also well aware how obstinate Mills could be.

LBJ’s first order of business was to get Mills on his side. Despite having the upper hand, Johnson recognized the hurdles Mills could present from his prior experience working with him in Congress. As Wilbur Cohen, who was the administration’s point person in crafting the Medicare bill, explained, “Johnson was keenly aware of Mills' legislative skill and his technical knowledge of social security legislation. He appreciated the need to give Mr. Mills some time and elbow room. President Johnson did not try to second guess Mills as to how to get a bill reported out by the Committee.” Soon after the JFK assassination, Johnson attempted to pressure Mills to move his administration’s version of the Medicare legislation through the House of Representatives. This tactic proved to be unsuccessful. Recognizing this, Johnson allowed Mills to take charge of the deliberations, as well as credit for the bill, making it Mills’ bill.

With this, Mills orchestrated a plan that would change Medicare forever, “monumental” as described by Wilbur Cohen. Johnson’s plan included only hospitalization coverage, as he was concerned broader coverage was not politically feasible especially due to increased costs. Seizing on Johnson’s plan as having insufficient coverage, the AMA and Republican John Byrnes (R-Wis) presented counter proposals, Eldercare and Bettercare respectively. Their plans expanded coverage to include physician services and showcased them as being voluntary. Mills in an effort not to alienate any party, would formulate a plan with compromises. Mills’ proposal, which was a combination of the Democrat and Republican plans, was labeled as “three-layer cake” by Cohen. The first layer was a mandatory plan to cover elderly hospitalizations (Medicare Part A) covered under Social Security proposed by the Democrats. The second layer was a voluntary coverage of elderly’s physician costs (Medicare Part B) subsidized by federal revenue proposed by the Republicans. The third layer was health coverage for the indigent administered by the states, which became Medicaid. With this, Mills co-opted the Republicans and the AMA by incorporating their demands in the proposal. All this was achievable only with LBJ changing his approach to Mills, courting him and eventually getting his buy in. This compromise resolved one set of conflicts that existed.

Soon after, another conflict arose that would cause new opposition to the Medicare bill. A conversation between Speaker John McCormack, Chairman Mills, and President Johnson projected that the new Medicare bill would cost $450 million more than was previously estimated. This could have easily derailed passage of the bill and added to LBJ’s concerns that delays would hinder the bill coming to the House floor for a quick vote. In a conversation with Speaker John McCormack and with Chairman Mills, President Johnson said, “For God's sake, don't let the dead cat stand on your porch. They stunk and they stunk and they stunk. When you get one out of that committee, you call that son of a bitch up before they can get their letters written.” Understanding that if the true cost of the Medicare bill became more public, opposition would grow and conflicts would arise. Johnson chose to hide the costs from the House. With this decision McCormack brought the bill to the floor, passed it, and subsequently sent it to the Senate. With the bill passing the House, Johnson cleared a potential hurdle.

In the Senate, another conflict arose with the Chairman of the Senate Finance Committee, Senator Harry Byrd (D-VA), an opponent of the Medicare bill. Worried that the bill would get stalled in the Senate Finance Committee, LBJ called Byrd for a meeting with other legislative leaders. At this meeting Johnson utilized the now famous “Johnson treatment.” After completion of the meeting and exiting the meeting, he was surprised to find himself in a press conference. Johnson put Byrd on the spot asking him whether the committee meetings would be moving forward. Byrd was uncomfortably pressured by LBJ’s large, hovering presence, as well as the president’s hands firmly placed on his shoulders. The threatening presence of Johnson led Byrd to state in front of the press that the Senate would be taking up the bill for a vote. Subsequently, there were no further obstacles. The Medicare bill passed the Senate to become reconciled between the House and the Senate members. The compromise bill passed overwhelmingly with the final count being 307-116 in the House (70 Republicans voting for the bill) and 70-24 in the Senate (13 Republicans voting for the bill). Medicare was then adopted between July 27th and 28th, 1965. On July 30, 1965, LBJ signed Medicare into law in Independence, Missouri.

However, after passage of the bill, LBJ was concerned that the AMA would not cooperate in its implementation. Johnson invited the AMA leadership to the White House. Rather than discussing Medicare, he asked the AMA to help set up a program to recruit doctors to serve in Vietnam. After they enthusiastically agreed, LBJ called in the press. The press, rather than asking about the Vietnam program, questioned the AMA officials about their support for the

Medicare program. LBJ quickly interjected, “These men are going to get doctors to go to Vietnam where they might be killed. Medicare is the law of the land. Of course, they’ll support the law of the land. Tell them.” Johnson once again effectively used the “Johnson treatment” when meeting the AMA and left the president of the organization at a loss for words, where he sheepishly responded, “Of course, we will. We are law abiding citizens, and we have every intention of obeying the new law.” Stunningly, the AMA, who for decades represented the main obstacle to the passage of Medicare, suddenly was a new-found ally.

Despite Johnson’s constant presence in the background, many look to diminish his importance in the passage of the bill. Many argue that Wilbur Mills, who put together “the three layered cake,” which was pivotal in formulating a bill catering to all the parties’ needs, was the creative force behind its passage. Others claim it was Wilbur Cohen, dubbed Mr. Social Security by JFK, who was the true architect of the bill. Rather than either single-handedly being responsible for the bill, many suggest it was the synergistic relationship between Wilbur Mills and Wilbur Cohen, dubbed as the “dynamic of the two Wilburs,” that brought the bill to fruition. After the passage of Medicare, credit was being heaved upon Mills. Unbeknownst to the public was that this was orchestrated with a compromise between LBJ and Mills, that would ensure Mills’ recognition. During an interview Mills gave to the LBJ presidential library he admitted, “We planned that, yes. Oh, yes.” Mills later acknowledged, “‘Johnson doesn’t get the credit he deserves…’ No other president would ‘have gotten half of it through.’” Leaving the technical details to be worked out between Mills and Cohen, it was LBJ’s political will and capital that was the true force behind Medicare.

To conclude, Johnson’s 1964 landslide victory and his political savviness to turn adversaries into allies, ultimately resulted in the passage of Medicare in 1965. Medicare has expanded greatly over the last 52 years, and its costs surpassed those that were originally proposed. President George W. Bush would further add to the cost by enacting Medicare Part D, which made individuals on Medicare eligible for prescription drug coverage. Medicare remains a controversial program. Fiscal conservatives want to rein in the expensive program, while progressives feel it has not been expanded enough. Compromises have preserved the program, but conflicts persist in the national health care debate that need to be resolved. Perhaps a new leader will emerge, with some of the skills LBJ possesed, to reach a new compromise in the future.