The Host
Julie Rovner
KFF Health News
Julie Rovner is chief Washington correspondent and host of KFF Health News’ weekly well being coverage information podcast, “What the Health?” A famous professional on well being coverage points, Julie is the writer of the critically praised reference e-book “Health Care Politics and Policy A to Z,” now in its third version.
On July 30, 1965, President Lyndon B. Johnson signed landmark laws creating Medicare and Medicaid. Sixty years later, the applications symbolize a fifth of the federal funds and supply protection to just about 1 in 4 Americans. In addition, the way in which Medicare and Medicaid construction and pay for medical care has set the usual for the non-public sector as nicely.
On this week’s particular episode of KFF Health News’ “What the Health?” podcast, host Julie Rovner interviews two specialists on the historical past, improvement, affect, and way forward for Medicare and Medicaid.
First, Rovner talks with Medicare historian and University of North Carolina well being coverage professor Jonathan Oberlander. Oberlander is the writer of the e-book “The Political Life of Medicare” and a former editor of the Journal of Health Care Policy, Politics and Law.
Then, Rovner chats with Sara Rosenbaum, professor emerita at George Washington University. Rosenbaum has spent almost her complete profession engaged on Medicaid coverage and has helped form key priorities on the federal and state ranges.
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Transcript: Happy sixtieth, Medicare and Medicaid!
[Editor’s note: This transcript was generated using both transcription software and a human’s light touch. It has been edited for style and clarity.]
Julie Rovner: Hello, and welcome again to this particular episode of “What the Health?” I’m Julie Rovner, chief Washington correspondent for KFF Health News, and I’m often joined by a few of the finest and smartest well being reporters in Washington. But this week we’ve received one thing particular for you. It’s an episode marking the sixtieth anniversary this summer season of Medicare and Medicaid, the dual authorities well being applications which have largely formed the way in which the U.S. pays for and delivers well being look after the previous half-century. To deliver us the story, I sat down with two of my favourite specialists on the topic, University of North Carolina professor Jonathan Oberlander and George Washington University’s Sara Rosenbaum. Here are my chats, beginning with Jonathan Oberlander on Medicare.
I’m so happy to welcome Jonathan Oberlander to the podcast. He’s a professor of social medication, professor of well being coverage and administration, and adjunct professor of political science on the University of North Carolina School of Medicine in Chapel Hill and one of many nation’s main specialists on Medicare. John, welcome to “What the Health?”
Jonathan Oberlander: Great to see you, Julie.
Rovner: So Medicare, to me not less than, stays the best paradox within the paradox that’s the U.S. well being care system. It is without delay each so widespread and so untouchable that it’s thought of the third rail of politics, but at its core, it’s a painfully out-of-date and meager profit that nonetheless threatens to go bankrupt regularly. How did we get right here?
Oberlander: Wow. Let’s speak about the advantages for a minute. And I believe one of many issues we are able to say about Medicare in 2025 as we mark this sixtieth anniversary is it nonetheless bears the imprint of Medicare in 1965. And when Medicare was designed as a program — and the thought actually dates again to the early Fifties — it was not seen as a complete profit. It was meant to pay for essentially the most consequential prices of medical care, for acute care prices. And so when it was enacted in 1965, the advantages had been incomplete.
And the issue is, as you realize very nicely, they haven’t been added to all that a lot. And right here we’ve, all of us know, as we grow old, we usually don’t get more healthy. I want it was true, nevertheless it’s not. And older individuals cope with every kind of complicated medical points and have a number of medical wants, and but Medicare’s advantages are very restricted, so restricted that really a really small proportion of Medicare beneficiaries have solely Medicare. Most Medicare beneficiaries have Medicare plus one thing else, and which may be a person non-public plan that they buy, referred to as a Medigap plan, or possibly a declining variety of folks have retiree medical health insurance that dietary supplements Medicare. Some low-income Medicare beneficiaries have Medicaid in addition to Medicare, and so they’re dual-eligibles. And some Medicare beneficiaries have additional advantages by the Medicare Advantage program, which I’m positive we can have rather a lot to say. So the underside line, although, is Medicare has grown. What, about 70 million Americans depend on Medicare. But the profit bundle — with some intermittent exceptions which can be vital, such because the addition of outpatient pharmaceuticals in 2006 — actually has not saved tempo.
Rovner: So let’s return to the start. What was the issue that Medicare got down to resolve?
Oberlander: Well, it was each a substantive drawback and a political drawback. The origins of Medicare are within the ashes, the failure, of the Truman administration proposals for nationwide medical health insurance through the mid- and late Nineteen Forties. And after that they had misplaced repeatedly, well being reformers determined they wanted a brand new technique. So as a substitute of nationwide medical health insurance, what right now we’d name single-payer, a federal-government-run program for everyone, they trimmed their ambitions all the way down to initially simply hospital insurance coverage, 60 days of hospital insurance coverage for aged Social Security beneficiaries. And that was it. And they thought if they only centered on older Americans, possibly they’d tamp down the controversy and the opposition of the American Medical Association and prices of socialized medication, all issues that had actually thrown a wrench into plans for nationwide medical health insurance.
It didn’t fairly work out as they thought. It took about 14 years from the time Medicare was proposed to enacted, and there was an enormous, divisive, controversial debate about Medicare’s enactment. But it was basically an answer to that political drawback of: How do you enact authorities medical health insurance within the United States? You choose a extra sympathetic inhabitants. Now, there was a substantive drawback, which was within the Nineteen Forties and particularly Fifties, non-public medical health insurance was rising within the United States for Americans who’re working-age. And that progress of employer-sponsored medical health insurance actually omitted retirees. They had been costly. Commercial insurers didn’t wish to cowl them. And the uninsured fee, if you happen to can consider it, for folks over age 65 earlier than Medicare was round 50% — not 15% however five-zero, 50%. And so right here you had a inhabitants that had extra medical wants, was costlier, and so they had much less entry to medical health insurance than youthful folks. And Medicare was created partly to finish that disparity and provides them entry to dependable protection.
Rovner: So as you talked about, Medicare was initially simply geared toward aged Social Security recipients. What had been a few of the largest profit and inhabitants adjustments because the years glided by?
Oberlander: So by way of populations, in 1972, Medicare added protection for individuals who’ve end-stage renal illness. So individuals who want dialysis, it doesn’t matter what the age — it’s a lifesaving expertise — they’ll qualify for Medicare. It didn’t actually make sense so as to add it to Medicare. It’s simply it was there. So they added it to Medicare. And additionally a inhabitants we don’t discuss almost sufficient about, youthful Americans with everlasting disabilities who’re recipients of Social Security Disability Insurance for a few years. They qualify for Medicare as nicely and are an important a part of the Medicare inhabitants. Beyond that, Medicare’s lined inhabitants has probably not modified all that a lot because the starting, which really could be an incredible disappointment to the architects of Medicare, who thought this system would increase to finally cowl all people.
In phrases of advantages, the profit bundle has been remarkably steady for higher and really in all probability for worse, except for, for instance, the addition of outpatient prescription drug protection, which got here on-line in 2006, the addition of protection for varied preventive providers resembling mammography and most cancers screenings. But Medicare nonetheless doesn’t cowl long-term stays in nursing houses. Many Americans assume it does. They might be upset to seek out out it doesn’t. Medicare doesn’t cowl, usually, listening to or imaginative and prescient or dental providers. Traditional Medicare run by the federal government doesn’t have a cap on the sum of money that beneficiaries can spend in a yr on deductibles and copayments and so forth. So actually its advantages stay fairly restricted.
Rovner: Even to this present day we maintain listening to about “Medicare for All,” “Medicare for All,” “Medicare for All.” Why has this by no means occurred? And may it?
Oberlander: Medicare was by no means meant simply to be for older individuals. The authentic imaginative and prescient was enact federal medical health insurance for the aged, show that it really works, then increase it to youngsters subsequent. And that approach you could have folks in the direction of the tip of life and at first of life lined. And after you try this, perform basically a pincer motion and canopy the remainder, the center ages, and convey them into Medicare till it’s Medicare for all.
And in order that was their aspiration, and it didn’t occur that approach. Some of it has to do with the prices of Medicare and the unexpectedly excessive price at first of the Medicare program. And when Medicare was seen as a fiscal drawback, there wasn’t a number of political house to increase it. Some of that has to do with simply historical past. If you have a look at the late Sixties when the Johnson administration was contemplating increasing Medicare to youngsters, which could’ve modified the trajectory of Medicaid and really of all of U.S. well being care coverage, the Vietnam War was raging and the prices had been actually excessive and so they didn’t wish to add the expense of that, so that they selected to not do it.
Part of it has to do with a shift within the political winds. And Medicare was enacted at a really liberal time in American political historical past. And within the Nineteen Seventies, American politics shifted to the appropriate, in order that arguably Jimmy Carter, a Democrat who turned president in 1976, he was arguably extra conservative on a well being coverage than Republican Richard Nixon was, the president that preceded him. So as American politics shifted to the appropriate, the thought of Medicare for all by this incremental technique kind of vanished. And in actual fact, Democrats largely deserted that, and so they went in a unique route, which finally culminates within the Affordable Care Act. They went to constructing on Medicaid and constructing on non-public insurance coverage.
What’s fascinating is you could have seen within the final decade this resurgence of “Medicare for All,” and naturally pushed most famously by Bernie Sanders within the Senate and thru his presidential campaigns. And it has a number of enchantment. You have a look at the general public opinion polls, it really polls fairly nicely. I believe a number of that’s actually an indictment of U.S. well being care and dissatisfaction with every kind of issues about American medical health insurance. But it faces so many obstacles. If it was straightforward to do, it could’ve been executed already. And curiosity group opposition, having to boost taxes, which isn’t straightforward within the United States, allegations of socialized medication in a rustic that has a robust libertarian focus, dislodging round 160 million folks with non-public insurance coverage and placing them into Medicare — there are simply monumental obstacles to Medicare for All. So I think it’s going to proceed to be a part of the talk, however we’re a good distance from it.
Rovner: Medicare can also be the largest single payer within the nation’s well being care system and for many years has set the usual for a way non-public insurance coverage covers and pays for well being care. Is that also the case?
Oberlander: It is in some ways. Medicare, at first, had very permissive fee insurance policies. It was basically a clean verify to the well being care trade, to physicians and hospitals. And not surprisingly, because of this, Medicare’s price ran up actually excessive in its first decade. When you get into the Nineteen Eighties, Medicare turns into an innovator in fee reform within the United States. And within the early Nineteen Eighties, it begins with hospitals and adopts what we name potential fee for hospitals within the early Nineteen Eighties, after which a payment schedule for physicians in a while on the finish of the last decade within the Nineteen Eighties. And Medicare has continued to be an vital innovator. It is the house right now for experiments in accountable care organizations and different improvements that we’d time period value-based buying.
And actually, if you happen to have a look at, for instance, what number of industrial insurers pay, they use Medicare’s doctor payment schedule. Now they don’t pay the identical quantity, as a result of they’re not as massive as Medicare. They don’t have the identical leverage. And in actual fact, hospitals on common are paid about twice as a lot by industrial insurers than Medicare and physicians about 20% to 30%. Commercial insurers use the payment schedule that Medicare has, after which they regulate the greenback quantity as a result of they merely don’t have the identical type of affect that Medicare does.
Rovner: I used to be going to say we hear rather a lot about administrative prices for medical health insurance. Medicare really has among the many lowest administrative prices, proper?
Oberlander: Yeah, Medicare is pretty low in administrative prices. And after all administrative prices are one of many causes American well being care is a lot costlier than different international locations. And if you consider it, when you enroll in Medicare, you’re usually enrolled for the remainder of your life. And that contrasts with non-public insurance coverage. It additionally contrasts with Medicaid, the place folks activate and off and it creates every kind of instability. Medicare is a program that’s federally administered, though after all a big share of this system is now delegated out to non-public insurers, and that’s altering the complexity of administrative preparations in Medicare, amongst different issues.
Rovner: We ought to in all probability return and speak about how Medicare has so many items, A and B and C and D. How did that occur? I imply, I prefer to say it was not made complicated on objective, nevertheless it was undoubtedly made complicated.
Oberlander: Yeah. So at first, Medicare was created with Part A and Part B. Part A extremely was insurance coverage for inpatient providers and hospitals, Part B for outpatient and doctor providers. And there have been two causes for that. One is that they had been marrying the usual and a number of non-public insurance coverage on the time. So we had Blue Cross for hospitals and Blue Shield for physicians, and that was similar to Medicare Part A and Part B. The different cause is the unique Medicare proposal was actually simply Part A, as we talked about earlier than, only for hospital insurance coverage, funded by payroll taxes by the Social Security system.
Part B, the concept that you’d have this insurance coverage that beneficiaries may receive for doctor providers that was going to be funded by paying premiums and normal revenues, that was added very, very late within the Medicare debate. And so it got here at a unique time. So it received it added on as Part B. And then finally we added Part C, that are non-public plans that beneficiaries can select now, referred to as Medicare Advantage, HMOs [health maintenance organizations] and PPOs [preferred provider organizations], and the entire alphabet soup, as an alternative choice to conventional Medicare. And then Part D, and Part D is prescription drug protection. So I believe we could also be operating out of the letters. We definitely have sufficient to confuse all people.
Rovner: We definitely do. So we maintain listening to about how Medicare goes broke. Is that true? And can or not it’s mounted? And how onerous would it not be?
Oberlander: People have been nervous about Medicare going broke since about 1970. And my philosophy on that is if you happen to’ve been worrying about one thing being unsustainable for a half a century and it’s nonetheless right here, you’re in all probability worrying in regards to the flawed factor. So the possibilities of Medicare actually ever going broke and going away are, if not zero, as near zero as you may get. What this has to do with is the way in which that Medicare is funded. And so Medicare Part A, hospital insurance coverage, is funded nearly totally by what we name an earmarked payroll tax, the payroll tax that employees and their employers pay only for that.
Rovner: And it’s a part of the Social Security tax, proper?
Oberlander: And it’s a part of the Social Security tax that folks pay. And every year, the actuaries from Medicare undertaking: How a lot cash are we taking in? How a lot do we’ve in balances for Part A? And what do the expenditures appear like? And so whenever you hear folks say the Medicare belief fund goes to go, quote, “bankrupt” in now it’s a few decade, I believe, projected from now, what they actually imply to say is: OK, after we get to 2036, Medicare proper now shouldn’t be projected to have 100% of the funds it must pay for Part A providers. We’ve had a number of intervals throughout Medicare’s political historical past after we’ve gotten all the way down to seven years, 5 years, 4 years. And Congress has by no means let that belief fund go bancrupt. Politically, give it some thought. If there’s one factor we learn about members of Congress, they wish to be reelected. There are 70 million folks in Medicare. I’m fairly positive a great way to not get reelected could be to get to say, I don’t know, October in 2036 proper earlier than the 2036 midterm elections, and say: We’re sorry. Medicare is simply going to cease paying.
So the excellent news is issues can change. Congress can undertake insurance policies, which they’ve prior to now, that stretch Medicare’s funds and strengthen its funds. So I believe there’s good cause to be involved about how can we stabilize Medicare financing. But by way of what retains me up at night time, Medicare going bankrupt, I wouldn’t let that trouble me, and I wouldn’t let it trouble you.
Rovner: So how have the politics of Medicare modified over time? I imply, at first it was very— it was supported by Democrats and opposed by Republicans, and now it’s President [Donald] Trump who says, Thou shalt not contact Medicare.
Oberlander: There’ve been some twists and turns. If you have a look at the vote on Medicare enactment in 1965, it was not the vote on Obamacare in 2010. There had been some Northern Republicans, average liberal Republicans, who voted for it, and conservative Democrats who voted towards it. So it was primarily a partisan debate however not completely a partisan debate. And I might say in between 1965 and it handed in 1995, the politics of Medicare had been consensual. There was a number of bipartisanship. If you consider the fee reforms in Medicare that we’ve right now and that form Medicare right now, the potential fee system, the Medicare payment schedule, these had been sponsored by Republican presidents and supported by bipartisan majorities in Congress.
And as you’ll vividly bear in mind, as a result of I do know that you simply lined this, the largest profit —tried profit — growth in Medicare’s historical past on the time in 1988 was sponsored by [President] Ronald Reagan, a conservative Republican. In 2003, the growth of prescription drug protection was below a Republican president, George W. Bush. So the partisan tides haven’t flowed in predictable methods, however I do assume it’s truthful to say, since 1995, there was an erosion of bipartisanship in Medicare and an actual breakdown. And the explanation I select that yr as a demarcation level is for the primary three a long time of Medicare’s life, it by no means lived below a Republican-majority Congress. And in 1995, after Republicans swept the ’94 elections that introduced [Rep.] Newt Gingrich to the speakership within the House and a Republican majority within the Senate, was the primary time you had Republicans in Congress as a majority governing Medicare, and so they pursued bold Medicare reform plans. And within the a long time since then, Democrats and Republicans have disagreed very sharply over Medicare and over the way forward for Medicare.
Now, Donald Trump has thrown a wrench within the politics in Medicare, as he has in lots of issues, as a result of he isn’t a standard Republican in lots of senses, together with on Medicare. And he stated explicitly when he ran for president the primary time that the hassle by [Rep.] Paul Ryan, who was chair of the Budget Committee, additionally speaker of the House, to actually reform Medicare and speed up privatization and make giant cuts in Medicare, he stated it was politically silly. Why would Republicans wish to try this? And so he has moved the Republican Party to a unique place in Medicare, and you’ll see it on this funds invoice that simply handed that did every kind of issues to Medicaid and little or no to Medicare. I believe the query is whether or not that Trump impact goes to endure previous Trump. And so after we get out to, oh, I don’t know, 2029, 2030, what’s the Republican consensus in Congress going to be? Have they really moved in that route? Or, notably with the hovering funds deficits, is it going to return to actually a debate between Democrats and Republicans about the way forward for Medicare?
Rovner: So let’s speak about privatization. Medicare Advantage, the non-public well being plan various to conventional Medicare, is now greater than half this system, each by way of folks and by way of funds. Is this the way forward for Medicare? Or will we glance again in a few years and see it as type of a brief diversion?
Oberlander: I believe it’s the current and possibly the longer term. The future is at all times so onerous to foretell, Julie, as a result of it’s unwritten. But, I imply, that is actually a surprising end result traditionally, as a result of what Medicare’s architects anticipated was that this system was going to increase authorities medical health insurance to all Americans, first with the older inhabitants, then including youngsters, then including all people. Did not end up that approach. The authentic aspiration was Medicare for all by any incremental means. Instead, 60 years later, we don’t have Medicare for all, however Medicare is generally privatized. It’s a hybrid program with a private and non-private element that more and more is dominated by non-public insurance coverage. And the truth that over half of Medicare beneficiaries are enrolled in these non-public plans is a surprising improvement traditionally, by the way in which with a lot of implications politically, as a result of that’s an vital new political pressure in Medicare that you’ve got these giant non-public plans, and it’s modified Medicare politics.
I don’t assume Medicare Advantage goes anyplace. I believe the query is: How massive is it going to get? And I’m unsure any of us know. It’s been on a progress trajectory for a very long time. And the query is: Given that each one the research present that Medicare Advantage plans are overpaid, and overpaid by rather a lot, by the federal authorities and it’s dropping some huge cash on Medicare Advantage and it’s by no means saved cash, is there going to come back some extent the place they really clamp down? There have been some incremental efforts to try to restrain funds. Really haven’t had a lot impact. Are we really going to get to a spot the place the federal authorities says: We want financial savings, yeah. This 22% additional that you simply’re getting, no, we are able to’t try this anymore?
So I believe it’s an open query about: How massive is it going to get? Is it going to be two-thirds of the Medicare program, three-quarters of the Medicare program? And if that’s the case, then what’s the future, turning the query on its head, of conventional Medicare if it’s that small? And that’s one of many nice questions on Medicare within the subsequent decade or two.
Rovner: So for all of the wants that Medicare does pay for, one enormous gap that is still is its lack of protection for long-term care, which I believe you talked about on the outset. I wrote my first story on Medicare’s lack of a long-term care profit in 1986 after I was in my 20s. Now I’m in my 60s, and we nonetheless haven’t solved the long-term care dilemma. Why has this one factor been so very tough to deal with?
Oberlander: It is the problem that won’t converse its title. It’s such an enormous drawback, and we don’t speak about it. And the way in which we manage and pay for long-term care within the United States is actually horrible. The prices of long-term care in nursing houses has skyrocketed. It’s, as anyone who is aware of who’s had a member of the family cope with this, it’s completely a staggering price to pay for anyone to remain in a nursing dwelling. And I believe, paradoxically, one of many causes we don’t speak about it’s really due to that price, as a result of the budgetary implications of this are so excessive that members of Congress and presidential administrations simply don’t go there. And what we’ve executed as a substitute is we’ve created a type of de facto nonsystem the place folks spend down, usually in not very best methods, to qualify for Medicaid. So we’ve received Medicaid as a serious payer for institutional long-term care.
We have expanded dwelling well being, long-term care, each in Medicare and Medicaid, and that’s a rising a part of the system. Private insurance coverage has by no means actually developed. It’s not very steady. The insurance coverage is dear and onerous for folks to afford and sometimes not superb. And I believe because the child boomers age, after all the necessity for long-term care simply retains rising and rising, and but we paid extra consideration to it whenever you had been in your 20s. Not up to now you, however you probably did it first. I imply, we paid far more consideration, I believe you’d agree, to this concern on the nationwide stage again when [Sen.] Claude Pepper was in Congress, what, 40 years in the past, and it’s not actually talked about anymore. We’ve type of swept it up below the rug. And the results of that’s a number of Americans are left with horrible conditions when anyone wants a long-term care keep.
Rovner: And 40 years later, folks nonetheless don’t know that Medicare doesn’t cowl most long-term care.
Oberlander: And sure, folks nonetheless don’t know. And yeah, they assume that: Medicare, after all, it’s a program for older individuals. Of course it should cowl long-term care. And sadly it doesn’t.
Rovner: So one different factor that Medicare does try this most individuals don’t understand is educate a lot of the well being care workforce, definitely docs. People don’t understand the way in which that Medicare subsidizes the coaching of docs. Is that one thing that we’re going to have to take a look at going ahead?
Oberlander: Medicare does play an enormous function in subsidizing medical training, and I believe — you ask: Is it one thing we’ve to take a look at? It’s one thing that after all gives a number of social worth. I believe that the problem for Medicare, and never only for graduate medical training however for all of Medicare, is that this: We have a federal funds deficit that was already monumental. We simply added to it and added to it rather a lot within the so-called One Big Beautiful Bill. So we’ve crimson ink so far as the attention can see. And my prediction, which I don’t assume takes a number of braveness, is that ultimately, in all probability sooner, members of Congress are going to search for and see: Wait a minute. We have this gargantuan deficit. And they’re going to say — it’s a deficit that’s going to have exploded due to the tax cuts — however they’re going to say: Oh, have a look at this deficit. We’ve received to tame authorities spending.
Well, OK. Where does the federal government spend cash? And after all, why did Willie Sutton rob banks? That’s the place the cash was. That’s what he famously quipped. Well, the place does Congress go for budgetary financial savings? And this has been true for 40 years now. They go to Medicare. So I believe there’s a reckoning coming the place Congress will search for main financial savings in Medicare because of the broader fiscal image within the United States, and that’s going to have implications for all elements of Medicare.
Rovner: So final query. I do know you don’t wish to predict the longer term. Is Medicare going to be round in one other 60 years whenever you’re prepared for it?
Oberlander: I’m going to be prepared for Medicare nearer to 6 years than 60 years. I gained’t be round in 60 years. Yes, sure. The most vital factor to say about Medicare is that retirement within the United States right now is unimaginable with out Medicare. Medicare is a cornerstone of well being safety, of retirement safety, within the United States. It is completely unthinkable that we wouldn’t have the Medicare program. And for all the issues and challenges that it has, it’s additionally vital on the finish of the day to recollect the successes it’s had and the important entry to medical care that it’s supplied. And to consider what the world would appear like for older Americans and individuals who’ve everlasting disabilities who didn’t have Medicare, what would occur if Medicare was not there? So I believe there’s no query that Medicare goes to be right here in 60 years. The query is: What type is Medicare going to take?
Rovner: Excellent. Jonathan Oberlander, thanks a lot.
Oberlander: It was nice to be with you, Julie.
Rovner: I’m so happy to welcome Sara Rosenbaum to the podcast. Sara is professor emerita of well being, regulation, and coverage at George Washington University, one of many, if not the, main specialists on Medicaid. She’s additionally the one that has taught me not less than 80% of what I learn about this system. So I’m additional thrilled that she’s agreed to come back be our information. Sara, welcome.
Sara Rosenbaum: Thank you for having me. It’s such a pleasure to be on the present.
Rovner: Let’s begin at first. Medicaid was type of an afterthought to Medicare once they had been each created 60 years in the past. How did Medicaid come to be?
Rosenbaum: Yeah, it’s a very fascinating query. This is, after all, the lore, that Medicaid was an afterthought. If you have a look at the unique act — which after all was an outgrowth of an earlier regulation, the Kerr-Mills Act, which had been enacted about 5 years earlier than — and also you learn the unique statutory language, which we attorneys experience doing, you might be amazed. This was not such an enormous afterthought. I might say that Wilbur Cohen and Wilbur Mills and Lyndon Johnson and all people else had a good suggestion of what they had been doing. They knew that they had been planting the seeds for a program that in the end would come to be the muse of medical health insurance for low-income folks throughout the United States, in addition to, after all, particular classes resembling folks with very extreme disabilities.
Rovner: Why don’t you remind us what Kerr-Mills was?
Rosenbaum: Yeah. So Kerr-Mills was an earlier, a restricted, federal grant program, very a lot structured the way in which Medicaid is structured right now, open-ended grants, nevertheless it actually centered on the aged. And after all it predated Medicare. And Kerr-Mills type of helped make the case for Medicare, as a result of it was apparent that it was such a restricted program in its attain. It couldn’t do what a common insurance coverage program for individuals who had attained a sure age, and in the end additionally who turn out to be disabled, would do.
Rovner: So what was the distinction between Medicare and Medicaid speculated to be once they had been signed into regulation 60 years in the past?
Rosenbaum: Yeah. So Medicaid was very a lot structured within the traditional fashion of a state grants program. It has come, after all, to be a lot greater than that. But it was a grant to states, and states would arrange state plans. This is all language that has turn out to be very acquainted to us. And they would offer medical help, because it was referred to as, to sure classes of poor folks. And the idea was that this system would begin with these folks, however tucked into the — the classes had been money welfare recipients — however tucked in there have been a bunch of individuals often called the medically needy, within the early days.
And the medically needy, I at all times felt, was kind of the primary seeds of one thing a lot larger, as a result of the purpose was that it was a program for individuals who had been low-income, who couldn’t afford their medical care, however didn’t get money welfare. So the idea was precisely the idea that has carried this system for 60 years now. And initially the thought was that it could actually — and naturally this has turned out to be the case — that that might allow individuals who had very severe well being care prices for issues that Medicare didn’t cowl — nursing dwelling care, dwelling well being advantages in the end, these sorts of actually big-ticket long-term care gadgets exterior of Medicare, as a result of Medicare was actually kind of like Blue Cross Blue Shield for previous folks like me.
Rovner: You weren’t previous on the time, although.
Rosenbaum: I used to be not. I used to be only a child. But this system was meant to duplicate what people had had by, throughout their working years. And so it was crucial and really profound, however restricted.
Rovner: So Medicare’s lengthy been the extra politically widespread of the 2 applications—
Rosenbaum: Yes.
Rovner: —primarily due to the political clout of older voters, which is the way it was created. How was it that Medicaid turned this system that grew a lot?
Rosenbaum: Well, I consider that Medicaid, and that is I believe what Wilbur Cohen understood—
Rovner: And you may remind us who Wilbur Cohen was.
Rosenbaum: Wilbur Cohen was the genius behind a lot of the early social welfare pondering who kind of was a bridge between the tutorial fascinated about help, the authorized fascinated about help. By then, by the point Wilbur Cohen was working his magic within the Johnson administration, possibly the only most vital article on social welfare coverage ever written had been written by Charles Reich, “The New Property.” That kind of spelled out how Americans had come to count on assist from the federal government for granted. So he was the mind belief, the one-man band behind pondering by, with members of Congress, what Medicare and Medicaid would appear like. He was actually the architect.
Rovner: He was the secretary of well being, training, and welfare at that time, proper?
Rosenbaum: Yeah. Well, I believe he was really the deputy, however you would be right. I don’t bear in mind whether or not he ever assumed the highest place or whether or not he in actual fact was second in command. It’s value checking. But he was the man. He knew that what would propel Medicaid ahead is that, in contrast to Medicare, which is tied to a premium construction, Medicare is funded by premium funds, which is nice, however premium funds are fairly distinctive as a result of they’re actuarially primarily based. They are kind of a really tightly managed type of financing, since you’re asking — whether or not it’s the federal government or now, after all, non-public insurers that contract with the federal government — you’re asking them to tackle a number of monetary danger. And so all people wished the — prefer it was actually going to work that approach — wished the reassurance of premium construction.
Well, Medicaid was not. Medicaid is a traditional public well being statute. It’s normal income. And so each time one thing occurred that required an intervention by the federal authorities the place well being care was involved, you would simply add a couple of pages to the Medicaid statute and find yourself with, voilà, a repair. So I used to be very privileged. I started my profession within the first decade of Medicaid’s existence, shortly after the primary nice leap had occurred after we created, in 1972, the Supplemental Security Income program, for folks with profound disabilities or the aged who had been very, very poor. And that, after all, was accompanied just about by Medicaid. People had been entitled to Medicaid.
And by the point I got here alongside, all people was taking a look at one other nice leap. And that nice leap, below the Carter administration, due to lots of people’s work alongside the way in which, was youngsters. Interestingly, the unique statute — and that is what I imply after I say, “You go through the statute” — there’s every kind of stuff that tells you the place all people knew this factor was going. There was the used-to-be-famous Ribicoff Amendment. Sen. [Abraham] Ribicoff of Connecticut provided an modification to offer states the pliability to cowl low-income youngsters with out regard to whether or not they lived in households that obtained money welfare. And not too a few years later, alongside comes the Department of Health and Human Services, primarily based at HEW, that claims, You know what? And after all that is approach earlier than the reproductive well being politics of right now. Somebody stated, You know, if we added an unborn element to the Ribicoff youngster possibility, then you would cowl poor pregnant girls.
And the unique Ribicoff youngster program, subsequently, together with its the-unborn element, which was regulatory, had been extremely vital. But they had been tied to money welfare help, and naturally money welfare help started to sink and sink and sink and sink. And by the mid-’70s, folks stated, Well, what if we decoupled this class from money welfare funding ranges and simply let poor youngsters have Medicaid? And there then ensued basically a decade-long effort so as to add poor youngsters and pregnant girls as teams in their very own proper to the Medicaid program. And—
Rovner: That was after I began protecting it.
Rosenbaum: Yes.
Rovner: I used to be going to say it was nearly kind of a stealth growth, as a result of it occurred little by little by bit. But that was the technique.
Rosenbaum: That was the technique. And after all the architect of that technique — there have been many, many dad and mom of that technique — however the true hero of that technique was Congressman Henry Waxman and his extraordinary employees, who had been so sensible, not solely in pondering by what they’d be capable to get executed within the House — he was after all a chair of the [Energy and Commerce] well being subcommittee at that time within the House — but additionally what these of us working exterior of presidency must do by means of delivering help within the Senate. And so yearly turned kind of, at first of the yr, a technique session with the singular Karen Nelson, who was the employees director for the well being subcommittee. And we’d all sit and say: OK, this yr we’re going to do X. And so we’ve received to spherical up — that is what you would transfer within the House, and that is what we’ve to go spherical up within the Senate, and these are the skin teams.
It was, they had been wonderful that approach — I imply, political athletes. And their political athleticism was used to attain this extraordinary breakthrough, not only for youngsters however in a while for long-term providers and helps for the aged, for folks with disabilities. We all have that type of wonderful legislative prowess to thank, and so they despatched this system on its approach. So by the flip of the twenty first century, we had a Medicaid program through which it was a on condition that low-income youngsters and pregnant girls would have protection. It was a on condition that this system was propelled — after all, there have been many different issues alongside the way in which — however could be a way more sturdy responder to long-term care wants, and to adults, to working-age adults, as a result of we acknowledged dad and mom as a bunch of people that could possibly be helped.
So all these seeds had been right here. And Medicaid had executed wonderful different work within the early twenty first century, like enabling a response to the disaster of New Orleans, as a result of it’s a normal income program, or the World Trade Center assaults, the place instantly hundreds of individuals wanted medical health insurance. And so Medicaid was consistently the primary responder, whether or not it was a structural first responder like protection for poor folks or whether or not it was a primary responder to naturally occurring or man-made disasters. And that was the brilliance of the early years.
Rovner: I used to be going to say additionally, Medicaid was used, I do know within the final 30 or so years, to principally give states more cash throughout financial downturns.
Rosenbaum: Absolutely. This is likely one of the issues that everyone was so delicate to, that as this system was constructing, constructing, constructing, what the federal authorities may — now see, simply how a lot debt the federal authorities can handle to work below — what the federal authorities may take in in the way in which of spending with a purpose to advance social welfare coverage. States, as a result of their economies are very in another way structured, as are their political and authorized programs, couldn’t. And so, many instances — many instances — most well-liked financing has been used to make it potential for states to do every kind of issues. And look, we may return to Sen. Russell Long, not precisely a civil rights icon, who was the daddy of Medicaid’s extraordinary household planning profit, who made positive, together with Sen. [Herman] Talmadge, who equally was not precisely a civil rights pioneer—
Rovner: Couple of Southerners.
Rosenbaum: Yes. That the household planning profit not solely could be expansive however could be paid to the states at 90% federal financing. So this concept goes all the way in which again to the early years, and also you’re completely proper that the financing has been used to make it potential for states to do issues, to make it potential for states to take care of their applications throughout downturns, proper up by the covid pandemic, after all. And that’s been a tremendously vital a part of the story, similar to Medicaid has been used to help the well being care security internet, each hospitals by its disproportionate-share hospital fee program, its different components that give states the power to fund their public well being programs, county-operated public well being programs, by Medicaid, and naturally one of the fascinating tales of all, which is the extent to which Medicaid actually took a couple of dozen experimental clinics from the Great Society years that had been struggling to outlive — there have been a couple of hundred by the point it occurred — and created the financing system that right now has created neighborhood well being facilities which serve 32 million folks. So, I imply, Medicaid is the powerhouse. It is the powerhouse.
Rovner: Today we consider Medicaid, as you had been saying, by way of this main inhabitants — seniors in nursing houses, low-income mothers and children, folks with disabilities. But Medicaid’s additionally turn out to be the nation’s main supplier of issues like drug therapy and rehabilitation and psychological well being care. How a lot has that been missed within the fashionable Medicaid discussions?
Rosenbaum: Well, I believe all of these items are likely to get missed till they’re threatened, proper? So abruptly, for the previous six months, all people’s had a 101 into what Medicaid does, as a result of each few years we discover we undergo the identical factor. This yr was more durable than any we’ve confronted earlier than. But I put all of Medicaid’s contributions to psychological well being and dependancy therapy within the class of long-term providers and helps that Medicaid, due to its financing construction, has been in a position to basically wrap round of a really poor non-public insurance coverage system and Medicare system that simply don’t, they’re not structured to fund these items. Somebody’s received to fund these items. And Medicaid has stepped up every time. And that’s why I believe the battle over Medicaid that we’ve all been dwelling by since January of this yr is so profound, as a result of the achievements of this system kind of attain into the whole lot — continual well being, public well being, insurance coverage protection. I at all times tried to clarify to my college students that there was nobody factor that Medicaid does. You can’t simply describe Medicaid as insurance coverage. It’s far more than that. So you might be completely proper to level this out.
Rovner: I really feel like in 2017 within the battle over the repeal of the Affordable Care Act, that was kind of an enormous change for Medicaid. I believe folks had lastly realized that Medicaid had grown bigger than Medicare, that it was not only a program for the poorest of the poor, that it did all of those different issues that you simply’re speaking about, and that actually a number of, I suppose, the stigma had been taken away. And but this Congress felt comfy — I don’t know if I’d say “comfortable” — however a majority of them voted to make these actually deep, profound adjustments. I imply, what’s that going to imply going ahead each to the well being care system and to the political system?
Rosenbaum: Well, I’ve spent a number of time pondering within the post-enactment interval about: When was the die solid? When was the die solid that set all people spinning? And I believe they, congressional leaders and the White House management, understood the deadly error they’d made in 2017, which was separating the tax reforms from the spending reforms, due to course we had been then in a position to battle the spending reforms on our personal turf, proper? Here, due to the choice that was made again, I’m positive, nearly a yr in the past—
Rovner: Literally the thought to do one “big, beautiful” invoice.
Rosenbaum: Yes. And that meant that Medicaid, together with meals stamps, or SNAP [the Supplemental Nutrition Assistance Program], together with the whole lot else, simply turned pay-fors. They simply turned offsets. And the secret then turned beating again each try to deprive Congress of pay-fors to do the factor that it actually wished to do, which was tax reform. And so we had been all decreased to — “we” within the sense of people that labored on social welfare coverage, together with a number of my associates who work on tax coverage however as a social welfare concern — we had been all decreased to bystanders on this effort to get to a trillion {dollars}.
Rovner: A trillion {dollars} in cuts.
Rosenbaum: A trillion {dollars} in cuts. And subsequently it opened the door to extraordinary issues. I imply, for instance, if I may take only a second on it, on the work necessities. The experiments from Arkansas and New Hampshire and different states, that fashioned the premise for a lot of the opposition to work necessities, had been very harmful. But the way in which they labored was individuals who had been on Medicaid would then need to report in in the event that they had been working, which was not good, as a result of they couldn’t navigate the crimson tape and fell off. But the mannequin that has been handed, that’s been enacted, is like dropping a hydrogen bomb, as a result of you’ll now not be capable to enroll in Medicaid if you happen to can not navigate the crimson tape. And so many people saved stating that this was a horrible thought in any occasion, however to impose this on the level of enrollment meant that you weren’t simply merely destabilizing protection for individuals who had it, you had been stopping folks from getting it.
And the way in which the statute is written, actually each individual on Medicaid right now who’s an affected individual, the working-age adults in growth states, goes to need to reapply for the advantages. It is big. Huge. And as a result of you possibly can’t have Medicaid on the level of enrollment except you would meet these necessities. And so I had many, many disputes alongside the way in which with individuals who thought it could be 3 million or 4 million or 5 million folks dropping their protection. It’s probably 20 million folks, 20-plus million, the growth inhabitants, as a result of whereas there are exemptions, you’re going to need to show an exemption. And a few of the exemptions might be simpler than others. But apparently, the way in which Medicaid works in growth states, folks simply enroll as low-income folks.
So whether or not you’re a father or mother, whether or not you could have a incapacity and also you’re ready for Social Security to make the dedication and also you’re kind of on as a poor individual whereas that’s taking place, it doesn’t present up. What reveals up is you’re a low-income individual. And you’re going to be confronted with having to show your value to get well being care. And after we tried to confront this, we had been advised fairly bluntly that folks had been advised: No, no, it’s the enrollment that’s going to take away all people. That’s the place the financial savings come from. And so it misplaced all of its humanity, and I believe it drove dwelling to me the purpose that this was all in regards to the cash and that’s why they had been in a position to succeed.
Rovner: So clearly, I imply, I do know an enormous supply of enrollment for Medicaid is well being care suppliers themselves. People present up, they’re uninsured, and there’s anyone good there who says, Hey, you’re eligible for Medicaid, so we are able to receives a commission. This goes to have a big impact on the supplier neighborhood, isn’t it?”
Rosenbaum: Yes. And these suppliers which have, say, expertise in attempting to assist their sufferers enroll in or maintain their protection will wrestle mightily, as a result of they’re dropping enormous quantities of income. We did a few fast analyses of simply how a lot cash, for instance, neighborhood well being facilities stood to lose, and it’s over a five-to-seven-year interval. It’s within the tens of billions of {dollars}. A pal of mine in Georgia advised me that they’re about to put off their complete — that is, We’re not affecting youngsters, we had been advised. They’re about to put off their complete youngster outreach employees, who assist households with youngsters throughout Georgia enroll in and maintain their protection — for the kids. And to allow them to’t afford them anymore.
Rovner: So what occurs subsequent? Does this occur? And if it occurs, does it take out the underpinnings of the complete well being care system? Or does Congress finally understand what it’s executed and alter its thoughts?
Rosenbaum: Well, yeah, I imply, I believe individuals are saying, Well, the two-year runway. It’s like two years till it turns into efficient. The two-year runway goes to kind of make folks neglect about this, after which, growth, it’ll be upon us. I don’t assume so. I believe the two-year runway will find yourself shining an enormous gentle on the truth that states can not implement the entire system. I imply, whereas we’re very centered on the quantity of people that will lose their protection, the states are confronting an insurmountable drawback right here. They’ve by no means needed to hyperlink Medicaid to work data. And Congress did the whole lot it may to make issues a lot worse. For instance, they might have simply stated that: We’re going to import the identical necessities that apply to SNAP to Medicaid. And so if you happen to’re getting SNAP in your working age, then you definately mechanically enroll in Medicaid. They didn’t try this. They didn’t try this. It’s a different-enough set of eligibility standards and exemption classes. For instance, SNAP ends, I believe, at about 60, and the Medicaid work necessities go all the way in which to 65.
Rovner: Age 60 and 65. Yeah.
Rosenbaum: Yes, precisely. But I imply, the exemptions are totally different. The necessities are totally different. And so individuals are speaking about, Oh, we’ll simply align reporting programs. No, no, no, no. You are chargeable for every kind of error fee penalties. If you simply depend on SNAP, you possibly can’t. So states haven’t any technique to cope with this, well being care suppliers that might be referred to as upon to actually present the documentation. My guess is that Russell Vought, the top of OMB [the Office of Management and Budget], who is actually the individual in command of implementing all of this, shouldn’t be going to take attestations as proof. They’re going to require documentary proof and recordsdata about well being exemptions and persevering with well being exemptions. This is all simply to get some well being care. It’s not like you possibly can eat along with your Medicaid card or pay your lease along with your Medicaid card.
So the astonishingness, I don’t assume that’s a phrase, however the astonishingness of this all, I believe, is simply going to construct and construct. And after all a lot consideration was paid to rural hospitals, and they also tucked on this little teeny-tiny rural hospital program. And fairly frankly — I simply did a post with my colleague Anne Reid about this at HealthAffairs — if you happen to learn the wonderful print — and Carole Johnson has an excellent one — if you happen to learn the wonderful print — we’re not so wonderful print — if you happen to learn the print of the statute, we famous that offsetting misplaced income is just one of 15 totally different actions. In truth, you possibly can’t simply go to the federal government and say, you possibly can’t go to Russell Vought and say, Please give us our allotment in order that we are able to offset, the way in which the fund labored again throughout covid. You need to spend your cash. My favourite is that you must spend your cash on issues like consultants that will help you design fee reform methods, fee reform methods for people who find themselves now not injured. So there’s no mitigation technique for this, and I believe the hope is that Congress will name it again
Rovner: If it doesn’t, is that this, I imply, the one kind of silver lining that I’d been kind of fascinated about is, nicely, possibly if we tear down the well being care system we’ll have to start out once more and construct a greater one. Is it potential that we may get there? Or are we simply going to limp alongside?
Rosenbaum: I’ve these ideas usually, after which I cease and assume, nicely, these of us with medical health insurance may sit there and say, Yeah, possibly we simply tear down the well being system to start out once more. Meanwhile, after all, we can have thousands and thousands of individuals with out well being care. So apparently, the Affordable Care Act, after all, was designed to not tear down the well being care system however to strengthen the well being care system. But it was the brilliance of the Affordable Care Act was that it noticed the holes and it kind of tried to repair them. And if we’d left it alone, with all people on this, what I contemplate to be, kind of an intermediate association, we may have executed precisely what you might be speaking about, with nearly all people within the United States lined. We may have begun to actually do the intense work of transferring to one thing extra unified, higher, and naturally cheaper and extra environment friendly. That’s proper — far simpler to make use of. But we’ve determined as a substitute to tear the Affordable Care Act aside, each the entry to {the marketplace} by rolling again the help and naturally the Medicaid reforms.
Rovner: Well, glad birthday, Medicaid.
Rosenbaum: Happy birthday, Medicaid. Today’s the day.
Rovner: I do know.
Rosenbaum: Yeah.
Rovner: Thank you a lot, Sara Rosenbaum.
Rosenbaum: Thank you for having me. It was a — it was each uplifting and unhappy.
Rovner: OK. That’s this week’s present. I hope you loved it. Thanks as at all times to our editor, Emmarie Huetteman, and our producer-engineer, Francis Ying. If you benefit from the podcast, you possibly can subscribe wherever you get your podcasts. We’d respect it if you happen to left us a evaluate. That helps different folks discover us, too. Also, as at all times, you possibly can e mail us your feedback or questions. We’re at whatthehealth@kff.org. Or you could find me on X, @jrovner, or on Bluesky, @julierovner. We’re going to take a brief break to let our hardworking employees have some relaxation. We’ll be again in your feed the Thursday after Labor Day. Until then, be wholesome.
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