Why Mom Misunderstands Medicaid

Why Mom Misunderstands Medicaid

It began as a modest, bipartisan program to help poor children. But as America’s economy hollowed out, Medicaid grew—and Republicans came to oppose it. No wonder Mom Misunderstands Medicaid.



In May 1965, just weeks before Lyndon Johnson signed Medicaid into law, his administration launched Head Start, an enrichment program for preschool-aged children from poor families.

The program’s administrators were appalled by the poor health of their students. In Jacksonville, Florida, more than half of participating children were anemic, and between one-quarter and one-third suffered hearing and sight problems. In Beaufort County, South Carolina, 90 percent of kids suffered from hookworms and roundworms. In Boston, almost one-third of Head Start youngsters showed signs of physical or mental health illnesses.

Rotting teeth, vitamin deficiency, chronic infections—50 years ago in the United States, this was how many 3- and 4-year-olds from poor families lived.

Then came Medicaid—an afterthought tacked onto the administration’s Medicare bill, and one that LBJ scarcely mentioned when he signed both measures into law. Medicaid’s roots were humble, its ambitions modest. As originally conceived, the program provided health insurance to poor children, poor pregnant women and some qualifying parents. In its first year, its budget was less than $1 billion—about $7.7 billion in today’s dollars.

Over 50 years, successive Congresses and presidential administrations vastly expanded the program’s scope to cover 80 million people, or almost one-quarter of the population. Its budget last year was $378 billion. To be sure, it has never enjoyed the popularity of Medicare, which covers a much more politically powerful constituency: seniors. But it has proven highly durable. Despite the GOP’s preference for smaller government and lower taxes, for many decades, Medicaid enjoyed broad backing from Republican leaders.

That was then. Now, congressional Republicans have proposed taking a hacksaw to Medicaid—a move that will, according to the Congressional Budget Office, leave many millions of poor people uninsured. For Democrats, the Senate GOP’s Better Care Reconciliation Act, which ends Medicaid’s entitlement status, is a “monstrosity.” For many Republicans, it is nirvana. “You and I have been dreaming of this since I have been around, since you and I were drinking at a keg,” House Speaker Paul Ryan told Rich Lowry, editor of National Review, earlier this year. That position isn’t widely popular: Amid much public outcry, the Senate postponed its anticipated vote on BCRA this week. But it testifies to the GOP’s full metamorphosis from the Party of Ronald Reagan to the Party of Ayn Rand.



Still, there’s more to the story. Republicans are right to observe that Medicaid was never supposed to grow as big as it did. Its framers intended the program to help a small few who were unable to capture the full benefits of America’s postwar prosperity. In their hubris, 1960s liberals assumed that a booming economy would continue to grow in perpetuity. They didn’t anticipate industrial decline, growing inequality, an explosion of single-parent households or the contraction of America’s unionized workforce and, with it, employer-based health insurance.

For 50 years, Medicaid proved a highly elastic Band-Aid for many of America’s economic wounds. Its desecration will leave us in an unfamiliar and dangerous place.

Though many conservatives regard the Great Society as a radical exercise in wealth and income redistribution, in fact, LBJ did not generally support quantitative measures like cash transfers or a guaranteed minimum income. Instead, his administration assumed that in a robust and growing economy, qualitative measures like education, job training and access to health care and food security would ensure that every American had an opportunity to share in the nation’s prosperity. For those temporarily or permanently unable to capture a share of this affluence, the government would provide compensatory assistance.

This thinking reflected conventional postwar exuberance. In recent memory, the United States had clawed itself out of the Great Depression, mobilized its economy to defeat fascism on two continents, and generated unprecedented, sustained growth. “A generation ago,” observed the veteran journalist Walter Lippmann in 1964, “it would have been taken for granted that a war on poverty meant taking money away from the haves and turning it over to the have-nots … But in this generation a revolutionary idea has taken hold. The size of the pie can be increased by intention, by organized fiscal policy and then a whole society, not just one part of it, will grow richer.”

The debate over health care followed this same trajectory. Twenty years earlier, in the waning days of the New Deal

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era, liberals fought unsuccessfully to extend universal health coverage to all Americans. At every turn, powerful opposition from the American Medical Association and congressional Republicans stymied their efforts. But by the 1960s, it was no longer clear that they even needed to pass national health care. After World War II, major employers began extending unionized employees such benefits as paid vacations, annual cost-of-living raises and private health insurance. What liberals once assumed government would need to do for its working-class citizens, private industry now offered on a contingent basis. By 1960, 100 million Americans—56 percent of the country—enjoyed access to private health plans.

In light of this reality, liberals scaled back their efforts and focused on two discrete categories of people: senior citizens, who by definition did not have access to employer-based insurance, and the very poor—especially children and single mothers—who were likewise left behind. Medicare and Medicaid were quintessential Great Society programs: limited in ambition in scope and designed to help groups of citizens who could not, by virtue of their age or condition, capture the advantages of prosperity.

The Social Security Amendments of 1965—the official name of the bill that established both programs—passed Congress with bipartisan support. In the House, 65 Republicans supported the legislation; 73 GOP members joined Southern Democrats in opposing it. In the Senate, Republicans voted 13 to 14 in favor of the bill. Though many conservative Republicans agreed with Reagan that Medicare represented “a short step to all the rest of socialism,” a large number of moderate and liberal GOP members openly supported government health care for the oldest and poorest Americans.

In the quarter-century that followed, Medicaid expanded both in scope and size. With strong bipartisan support, Congress extended the program to include disabled adults who qualified for Supplementary Security Income and allowed states to care for those in need of psychiatric care or suffering mental disabilities. Richard Nixon signed both measures into law. Reagan tried unsuccessfully to convert Medicaid into a block-grant program in 1981—meaning it would no longer be funded according to the number of people who qualified for it (much like other entitlement programs, including Medicare or the federal home mortgage deduction). Instead, it would receive a fixed level of funding. If need surpassed available funding, states would be forced to cut enrollment or services. But Reagan later changed course. With overwhelming bipartisan support in Congress, he signed a series of bills that sharply raised the income eligibility level for women and children, created new categories of mandatory or optional coverage, and made it easier for people who lost eligibility because of rising incomes to remain in the program during a transition period.

All told, the number of Medicaid recipients rose from 4 million in 1966—the year of its inception—to 35.8 million in 1992. Most of that expansion occurred under Republican presidents and with the strong support—or at least consent—of GOP members of Congress.

Indeed, Republicans didn’t set their sights on Medicaid until the mid-1990s, when Newt Gingrich’s conservative revolution turned the party’s caucus to the hard right. That trend accelerated during the presidency of George W. Bush, as the GOP attempted—to no avail—to privatize Social Security and convert Medicaid into a block-grant program. Since the passage of the Affordable Care Act, which vastly expanded Medicaid, and the advent of the Tea Party, Republicans have existed in a perpetual state of war with Medicaid.

But it wasn’t always so.


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