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July 30 2015

Unhappy 50th Birthday Medicare and Medicaid

Hadley Heath

In 1961, Ronald Reagan gave a famous speech on socialized medicine. His words were prophetic, and could apply to a variety of bad ideas about government-run health care. But at this point in time, Reagan was trying to warn the American people about liberal proposals to fund health insurance for senior citizens through Medicare and for low-income people in Medicaid. These proposals became law 50 years ago today, on July 30, 1965.

Here's one of the most quoted and well known parts of Reagan's 1961 speech:

One of the traditional methods of imposing statism or socialism on a people has been by way of medicine. It’s very easy to disguise a medical program as a humanitarian project. Most people are a little reluctant to oppose anything that suggests medical care for people who possibly can’t afford it.

Reagan went on to describe the events of this time:

Now, the American people, if you put it to them about socialized medicine and gave them a chance to choose, would unhesitatingly vote against it. We had an example of this. Under the Truman Administration it was proposed that we have a compulsory health insurance program for all people in the United States, and, of course, the American people unhesitatingly rejected this.

So, with the American people on record as not wanting socialized medicine, Congressman Ferrand introduced the Ferrand Bill. This was the idea that all people of social security age should be brought under a program of compulsory health insurance. Now this would not only be our senior citizens, this would be the dependents and those who are disabled, this would be young people if they are dependents of someone eligible for Social Security.

Now, Congressman Ferrand brought the program out on that idea of just for that group of people. But Congressman Ferrand was subscribing to this foot-in-the- door philosophy, because he said “if we can only break through and get our foot inside the door, then we can expand the program after that.”

Hm, anyone know of any recent expansions of government into health care?

Reagan was right: Medicare and Medicaid are single-payer programs that liberals established in hopes of one day including every individual American in a universal, government-run health program. 

Some people will point out that Reagan was no saint when it comes to healthcare policy: He signed EMTALA into law, the Emergency Medical Treatment law that requires hospitals to treat everyone. He expanded Medicaid, and he introduced Diagnosis Related Groups (DRGs) to Medicare (a form of price setting). 

Unlike ObamaCare, Medicare and Medicaid have, even since their passing votes into law, enjoyed some bipartisan support. ObamaCare, on the other hand, had zero support from any Republicans whatsoever, and that's part of the reason it remains so divisive (instead of enjoying the broader popularity we see in Medicare and Medicaid).

But regardless of what reforms have happened over these past 50 years in the history of Medicare and Medicaid, the programs continue to face challenges today. There are budget shortfalls, too-low and too-slow provider reimbursements, limited access to care, and threats to the sustainability of these behemoth programs.

It's not a very happy 50th birthday for these Great Society programs. And it's not a very "Great Society" that ignores these problems. Millions of people (54 million enrolled in Medicare and 70 million enrolled in Medicaid) are trapped in a government-run healthcare system (along with our veterans in the VA). These programs might sound like a humanitarian project, but they've actually limited how the market could provide innovative, efficient, high-quality care for those who need it most. 

On a positive note, it's not too late to reform these programs. By offering more choice and competition, Medicare and Medicaid could be transformed into market-friendly, consumer-friendly programs. After 50 years of price setting and government control, aren't we ready to try a different direction?

Independent Women's Forum is an educational 501(c)(3) dedicated to developing and advancing policies that aren’t just well intended, but actually enhance people’s freedom, choices, and opportunities. IWF is the sister organization of the Independent Women’s Voice.​
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