Tracing the History of CMS Programs: From President
Theodore Roosevelt to President George W. Bush
President Theodore Roosevelt Theodore Roosevelt, who served
from 1901 to 1909, advocated the passage of social insurance programs
during his unsuccessful run for another term in 1912. Since he believed
that a strong country required healthy people, he favored the passage of
health insurance legislation, although he assumed that such legislation
would come from the states, rather than the federal government, and cover
only the working classes.
President Franklin D. Roosevelt
Franklin D. Roosevelt, who was Theodore Roosevelt's distant cousin
and who was married to TR's niece, continued the fight for social
insurance. During the first of his four terms, Congress passed the Social
Security Act of 1935. This epochal piece of legislation contained old-age
insurance, unemployment compensation, and maternal and child health, but
not health insurance. Although important administration officials, such as
relief administrator Harry Hopkins, favored the passage of health
insurance, President Roosevelt decided that it was too controversial to
include in his proposed Social Security Act and sent the issue off for
further study.
Surgeon General Thomas Parran served as the Roosevelt's principal
spokesman on health care. As head of the Public Health Service, he was
sometimes wary of proposals that would expand the power of the Social
Security Board. He became an important proponent of federal aid for
hospital construction, which led in 1946 to the Hill-Burton hospital
construction program. In exchange for federal funds, hospitals were
required to serve the poor. He was the first to propose limiting health
insurance to Social Security beneficiaries.
President Harry S. Truman Harry Truman, who became President
upon FDR's death in 1945, considered it his duty to perpetuate Roosevelt's
legacy. In 1945, he became the first president to propose national health
insurance legislation. After Congress rebuffed his request, he reiterated
his appeal after his surprising victory in the 1948 presidential
elections. Congress continued to oppose the measure. In 1950, he signed
the Social Security Amendments which provided federal funds to states for
vendor payments for medical care of poor aged called Old-Age Assistance;
it became the foundation for the Medicaid program.
President Dwight D. Eisenhower In 1954 Dwight Eisenhower
proposed a plan to re-insure private insurance companies against unually
heavy losses on health insurance as part of a comprehensive health and
welfare program that Congress ultimately rejected. Although his proposal
failed, President Eisenhower oversaw significant progress in services for
the disabled. In 1954, vocation rehabilitation legislation was passed for
states to help the disabled return to work. In 1956, in a significant
expansion of Social Security benefits, President Eisenhower signed the
disability insurance program into law. The Hill-Burton hospital
construction program was expanded to cover rehabilitation facilities.
Congressional Debate
Among the Congressional opponents of President Roosevelt and
Truman's approach to national health insurance was Senator Robert A. Taft
of Ohio. The son of President William Howard Taft, the younger Taft, who
served in the Senate from 1939 to 1953, became one of the leading
legislators of his generation. He favored providing federal aid for health
care for the poor that would be administered by the states.
Representative Aime Forand of Rhode Island introduced the legislation
in 1957 that is generally regarded as the direct precursor of Medicare.
Forand, who served on the House Committee on Ways and Means, was not the
first choice of the bill's authors. They turned to him only after two more
senior-ranking members of the Committee turned them down.
Representative Wilbur Mills of Arkansas, who became head of the Ways
and Means Committee in 1958, exerted more influence over Medicare and
Medicaid than any other single legislator. The Social Security Amendments
of 1965, that initiated the two programs, reflected many of the priorities
and preferences of Representative Mills.
Senator Robert Kerr of Oklahoma, who entered the Senate in 1949,
quickly became a major factor in its deliberations over Social Security.
His opposition to Medicare and his desire to find a constructive
alternative led to passage in 1960 of Medical Assistance to the Aged, also
known as Kerr-Mills. It expanded the Old-Age Assistance vendor payment
program to include coverage to the "medically needy" aged, i.e., those not
poor enough to qualify for Old-Age Assistance, but too poor to pay their
medical bills.
Senator Clinton P. Anderson of New Mexico had served as President
Truman's Secretary of Agriculture and entered the Senate in the same year
as Robert Kerr and Lyndon Johnson. In 1961 he became the principal Senate
sponsor of the Kennedy administration's Medicare bill.
Representative John Byrnes of Wisconsin served as the ranking minority
member of the Ways and Means Committee in 1965. His alternative proposal
to the administration's Medicare bill, a voluntary program that would
cover physician services, led to the inclusion of Supplementary Medical
Insurance (known as Medicare Part B) in the final legislation.
President John F. Kennedy John F. Kennedy made the passage of
Medicare one of the priorities of his administration. Despite intense
bargaining with members of Congress, Kennedy died before gaining his
objective. The closest he came to his goal was a vote in the Senate on
July 17, 1962. Thanks in part to the efforts of Senator Robert Kerr, the
administration lost by 4 votes: a count of 52 to 48.
President Lyndon B. Johnson
After the assassination of President Kennedy, the newly elected
President Johnson made passage of Medicare his top legislative priority.
Bureau of the Budget director Kermit Gordon echoed the thoughts of many
when he called Medicare the "jewel in the crown of the federal
government." Medicare and Medicaid were enacted as Title XVIII and Title
XIX of the Social Security Act. Medicare extended health coverage to
almost all Americans aged 65 or older (e.g., those receiving retirement
benefits from Social Security or the Railroad Retirement Board). Medicaid
provided health care services to those receiving welfare benefits:
low-income children deprived of parental support and their caretaker
relatives, the elderly, the blind, and individuals with disabilities.
Lyndon Baines Johnson signed the Social Security Amendments of 1965
into law on July 30, 1965 at a dramatic ceremony held at the Harry S
Truman Presidential Library in Independence, Missouri. Some of Johnson's
advisors urged him to sign the legislation elsewhere, for fear people
would think that the administration wanted to pass national health
insurance for people of all ages, as President Truman had. Johnson
dismissed such objections, saying he wanted to recognize President Truman
as the "daddy of Medicare."
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July 1, 1966-Medicare begins In implementing Medicare,
Social Security Commissioner Robert Ball worked closely with Wilbur J.
Cohen, the Under Secretary of Health, Education and Welfare. Cohen had
served as the administration's Congressional liaison in the long fight to
pass Medicare. Cohen compared beginning Medicare on July 1, 1966 to
planning the invasion of Normandy. "We did a better job of preparation
than we did for almost any other program," Cohen said. "As I look back on
it....I don't know how in the hell we did it, to tell you the truth," Ball
recalled. About 19 million elderly enrolled in Medicare when the program
began 11 months after enactment.
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January 1, 1966-Medicaid begins Federal Medicaid funds
became available to States on January 1, 1966. Medicaid was optional;
states were not required to participate in the program and could phase it
in. Medicaid expanded upon the Old-Age Assistance and Medical Assistance
for the Aged programs to include under 65 populations that received
welfare benefits--parents and children receiving Aid to Families with
Dependent Children; the blind receiving Aid to the Blind; and the disabled
receiving Aid to the Permanently and Totally Disabled. About 8 million
people were estimated to be eligible for Medicaid.
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Medicare prescription drug task force Assistant
Secretary for Health and Scientific Affairs Philip Lee, who more than
twenty years later held the same position under President Clinton, chaired
a Presidential Task Force charged by President Johnson with examining
whether prescription drugs should be added to the Medicare program. In
December 1968, at the end of Johnson's term, the task force recommended
adding outpatient prescription drugs to the Medicare program.
President Richard M. Nixon
In 1972, Richard Nixon signed into law the most significant
expansion of Medicare eligibility to date; nearly 2 million individuals
under age 65 receiving Social Security disability insurance payments and
individuals with end-stage renal disease (ESRD) were newly entitled to
Medicare. ESRD patients were the first group granted Medicare eligibility
based on a specific condition. Medicare was given the authority to conduct
demonstration programs. Medicaid eligibility for the elderly, blind and
disabled residents could be linked to eligibility for the newly enacted
Federal Supplemental Security Income program (SSI).
Concern over the cost of health care led President Nixon to favor
federal funds to stimulate the creation of Health Maintenance
Organizations. The 1972 HMO Act provided for start-up grants and loans for
the development of health maintenance organizations (HMOs); HMOs meeting
Federal standards relating to comprehensive benefits and quality were
given preferential treatment in the marketplace.
President Gerald R. Ford Vice-President Ford was Chairman of
the Domestic Council Committee on the Right of Privacy. During that
period, the Administration developed legislation that was subsequently
signed into law by the new President Ford in 1974. The Privacy Act
provided, for the first time, comprehensive rights to individuals with
respect to personal information the Federal government held about them. It
required public notice of new data systems and of intended uses of
information, gave individuals a right to see their own records, and
controlled how the Government could use their information.
President Jimmy E. Carter
As one of his first actions, Health, Education and Welfare
Secretary Califano put together a team to explore ways of reorganizing the
department. Califano wanted Medicare and Medicaid put together for a
variety of reasons including preparation for national health insurance, a
reaction to a two class system of medicine, to improve the management of
the programs, and to increase their leverage. Because Califano wanted no
interference from Congress or private interest groups, he made sure that
the group worked in total secrecy and had the charts for the President's
briefing printed at the Pentagon. In early March, barely three months into
the new Administration, Califano announced the creation of the Health Care
Financing Administration.
In 1979, HCFA Administrator Leonard Schaeffer consolidated HCFA
operations in Woodlawn, outside of Baltimore. The consolidation brought
former Social and Rehabilitation Service Medicaid employees who worked in
downtown Washington and former Bureau of Quality Assurance employees who
worked in Rockville, Maryland to the Medicare employees from the Bureau of
Health Insurance at Social Security already at Woodlawn in suburban
Baltimore.
To deal with rapidly rising health care costs, President Carter
proposed a national hospital cost containment program which failed in the
Congress.
President Ronald W. Reagan
The Greenspan Commission was formed in 1981 to resolve a financial
crisis in Social Security. Once a deal was created to save Social
Security, the legislation moved through the Congress very rapidly. The
Administration had prepared a proposal to slow the rate of growth in
Medicare spending for hospital services, which had been rising very
rapidly. The Social Security Admendments spawned by the Greenspan
Commission provided a ready legislative vehicle for the new Medicare
hospital prospective payment system. President Reagan promoted a
competition plan for Medicare which did not receive such favorable
treatment from the Congress.
Over the course of President Reagan's two terms, a number of changes
were made to Medicare and Medicaid, primarily through annual budget
reconciliation legislation. Highlights of these changes include expanding
Medicaid waivers to allow states more flexibility in providing home and
community-based services to beneficiaries who otherwise would have been
institutionalized as well as waivers allowing states more flexibility in
using managed care. Medicare changes included a new prospective payment
system for inpatient hospital services, risk contracts for HMOs, and new
Peer Review Organizations to improve the quality of health care. As a
condition of participation in Medicare, hospitals with emergency rooms
were required to provide emergency screening and treatment to all patients
in COBRA 1985. The Clinical Laboratory Improvement Amendments (CLIA) of
1988 strengthened quality performance requirements for clinical
laboratories in order to assure accurate and reliable laboratory tests and
procedures.
Secretary Bowen came to HHS in 1986 with the goal of extending Medicare
to cover the costs of catastrophic illness. President Reagan called upon
the Secretary in the State of the Union to develop such a plan. A
Secretarial task force made recommendations and Congress subsequently
passed the Medicare Catastrophic Coverage Act of 1988. It made the most
significant changes since enactment of the Medicare program; including
improved hospital and skilled nursing facility benefits, an outpatient
prescription drug benefit and a cap on beneficiary cost-sharing liability.
The benefits were financed by beneficiaries through new premiums and an
income tax surcharge.
Nursing home reform was enacted in OBRA 1987 after the Institute of
Medicine issued a report calling for new national standards to improve the
quality of nursing home care.
President George H.W. Bush
Newly confirmed Secretary Louis Sullivan was confronted with upset
higher-income seniors who did not want to pay for the new benefits in the
Medicare Catastrophic Coverage Act of 1988, since many of them already had
similar benefits from their prior employers. Congress quickly repealed the
law in 1989, before much of it had taken effect.
HCFA Administrator William Roper worked with Congress on physician
payment reform legislation enacted in 1989. Physician payments were made
through a new Medicare fee schedule based on a resource-based relative
scale which replaced charge-based payments. For the first time, physicians
were limited in how much they could bill beneficiaries above the new fee
schedule. Medicaid coverage of pregnant women and children was expanded
several times, a Medicaid prescription drug rebate program was established
and low-income Medicare beneficiaries were provided help in paying
Medicare premiums and cost-sharing.
To deal with the problem of a growing number of Americans without
health insurance, President Bush proposed a "Comprehensive Health Reform
Program" which featured tax credits and vouchers in the Spring prior to
his re-election campaign.
President William J. Clinton
In 1993, newly elected President Clinton proposed a "Health
Security Act" which would have provided universal health care coverage to
all Americans. Critics of the plan prevailed in the Congress which gave
it, and alternative proposals advanced by Republican members, vigorous
debate, but did not enact it.
HCFA Administrator Bruce Vladeck presided over the move from the campus
of the Social Security Administration to the present CMS headquarters
building which opened in 1995. With the opening of "single-site" as the
employees referred to it, all HCFA central office staff were located in
one office complex. One of the primary objectives, consolidation of
Medicare and Medicaid staff, of Joseph Califano's 1977 reorganization had
finally been met.
After a hard-fought debate in the Congress, President Clinton signed
welfare reform legislation in August 1996. It replaced welfare with new
work requirements and broke the link between Medicaid and welfare.
The Health Insurance Portability and Accountability Act of 1996
contained private health insurance reforms that had been the subject of
debate for years, administrative simplification, a new Medicare Integrity
Program, and privacy provisions.
A financing crisis in Medicare precipitated passage of the Balanced
Budget Act of 1997 where the rate of increase in Medicare payments was
slowed thereby extending the life of the Hospital Insurance program (Part
A) by a decade, several new prospective payment systems were required, a
new Medicare + Choice program to increase the availability of private
health plans was established, and a new State Children's Health Insurance
Program (SCHIP) was created to extend health insurance coverage to
children in families with incomes too high for Medicaid but not high
enough to be able to afford private insurance on their own.
President George W. Bush
George W. Bush, the second son of a President to reach our Nation's
highest office, proposed significant reforms to the Medicare program,
including an outpatient prescription drug benefit. Congress is currently
considering these proposals. Administratively, he has provided States with
increased flexibility to manage their Medicaid programs including the new
Health Insurance Flexibility and Accountability waivers which are designed
to increase the number of low-income individuals with health insurance
coverage.
HHS Secretary Tommy Thompson in July 2001 renamed the Health Care
Financing Administration the Centers for Medicare & Medicaid Services
as part of his effort to create a new culture of responsiveness in the
agency. CMS Administrator Tom Scully launched a series of Open Door Forums
and listening sessions, held around the country, with health care
providers to listen to suggestions for improvement and to strengthen
communication. States now have national account representatives to
facilitate their work with CMS and provider groups have senior level staff
designated to address their concerns. |