With employers providing most of health insurance in the country,
there are two groups that are predominantly left out,
the poor and unemployed who don't have
an employer and the elderly who have stopped working.
In 1960, 35 percent of the elderly were living in
poverty predominantly because of high healthcare costs without insurance.
This became a major issue.
And in 1957, Representative Forand of Rhode Island introduced the first Medicare bill.
His idea was to tie Medicare and payment of coverage for the
elderly to Social Security and pay for through payroll taxes.
Not much happened. Although, how to
provide healthcare insurance to the poor and elderly was
a major issue in the 1960 election between John F. Kennedy and Richard Nixon,
but not much happened after Kennedy got elected.
In the early 1960s,
Congress passed a compromise water down bill called Elder Care,
which allowed the states to voluntarily get
federal funds to provide health coverage for the poor and elderly.
Few states did it, and it was widely viewed as a failure.
In 1964, Lyndon Johnson swept into the White House with a huge landslide victory.
He got more than 60 percent of the vote.
And he began introducing major transformational legislation,
the civil rights legislation,
education legislation, immigration and health care.
Collectively, they became the Great Society program.
Within seven months of his coming into office, July 30,
1965, he signed legislation for
Medicare and Medicaid in Independence Missouri right near Harry Truman.
Medicare was a program set up to provide coverage to the elderly,
those people over 65.
Medicaid was a state and federal combined program paid for largely by
the federal government and administered by states to
provide care to the poor and to disabled people.
And that was the structure.
Employer sponsored coverage for people of working age,
Medicare for the elderly,
Medicaid for the poor.
That was the main bulk of how we paid for healthcare.
But there were other government programs.
There is Veterans Administration program to pay for healthcare for vets.
There's Tricare which pays for healthcare for
Defense Department and soldiers and their dependents.
There's the Indian Health Service that pays for the healthcare of native Americans.
And there are other programs such as
the Federal Employee Health Benefits Program that pays for federal workers.
The result is a very complex system of how we pay for
healthcare and the care delivered by various different people; doctors, hospitals,
home healthcare agencies, and all the others; the drug companies,
the device manufacturers and others who provide the services and the goods in the system.
We have a very complicated system.
Next, we're going to look at how we actually pay for healthcare,
how insurance companies, Medicare and Medicaid,
actually pay doctors and hospitals to provide care.