Chapter 8: Public Health Insurance Programs

History of Insurance

Medicaid

During World War II, policymakers became aware that poor Americans were not getting health care. This became obvious because of the state of men's health when they received physicals when being drafted into the war. It would take another twenty years before the federal government enacted legislation addressing health care for those who could not afford it.

It was not until 1960 that Congress passed a law that gave federal funding to states to set up health care programs for the poor. But, implementation was spotty.

Medicaid was quietly added to the Social Security Act of 1965 with little fanfare. In fact, most watchers had no knowledge that Medicaid was part of the law until after it was enacted. When the Social Security Act came along, Representative Wilbur Mills, chairman of the powerful House Ways and Means Committee, slipped health care for the poor into the legislation. This last minute move even took President Lyndon Johnson by surprise. But, the proposal would further Johnson's War on Poverty, and it would ease tensions with the American Medical Association, which opposed Medicare but supported health coverage for poor Americans.