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Healthcare history: How the patchwork coverage came to be

A shipyard's need for healthy workers, World War II wage freezes and attempts by the government to expand healthcare coverage led to our unique patchwork of coverage.

February 27, 2012|By Bob Rosenblatt, Special to the Los Angeles Times

For years, there had been talk of the needs of the elderly, who couldn't afford the hospital bills that came with the ravages of old age. Old people were a sympathetic and deserving group for politicians. President Lyndon B. Johnson, armed with the power and prestige of a landslide victory in 1964 and the support of big Democratic majorities in both houses of Congress, pushed through a legislative three-layer cake.

For people ages 65 and older, there would be Medicare Part A. It would pay their hospital bills with taxes collected from workers, just as the government collects taxes from workers to pay for Social Security retirement checks.

The second layer on the cake was Medicare Part B, set up in a fashion to win over doctors: They would receive their usual and customary fees for each thing they did for patients.

The third layer on the cake was Medicaid, a federal-state program of care for the poor.

Even after Medicare became law, there were great fears it might be too controversial to work. Would doctors refuse to see Medicare patients? Would Southern hospitals agree to dismantle their segregated wards and have patients of different races sharing the same rooms?

The doctors didn't strike. And the hospitals were immediately integrated without protest.

Today, Medicare seems like the birthright of every American who reaches age 65. John Breaux, a former U.S. senator from Louisiana, likes to tell the story of an elderly woman who accosted him at an airport, declaring, "Don't let the government mess with my Medicare."

Seniors had their national health insurance, and the Democrats thought they had a winning issue. Bill Clinton entered his presidency in 1993 with an ambitious plan to extend national health insurance to everyone.

Hundreds of experts spent hours behind closed doors drawing up intricate plans. But Congress felt excluded and insulted, and the plan never came to a floor vote in the House or Senate. Its fate was sealed when the GOP made big gains in 1994, giving Clinton a Republican House to deal with for the rest of his presidency.

The big plan had failed.

When President Obama approached the health insurance dilemma, he avoided the Clinton tactic of creating a detailed blueprint without input from Congress.

Instead, he relied on the congressional process. It was filled with deals.

Key to the plan was a mandate that everyone buy into the system; it was the best way to spread out the costs of illness. The insurance industry gave up the power to reject people who might be sick in return for getting a guarantee of 34 million new customers.

Drug companies agreed to cut their charges under Medicare Part D, Medicare's prescription drug plan created in 2003, as long as the government wouldn't force them to negotiate on prices.

The process would be run through the existing framework of private insurance companies. This infuriated liberals in the Democratic Party, who wanted a "public option," a new plan that would be like Medicare.

Even if the Supreme Court throws out the mandate and the Republicans sweep the presidential and congressional elections, it seems a safe bet that some provisions in the Affordable Care Act will stay on the law books.

People already enjoy some benefits and won't want to give them up: There are no longer any lifetime limits on insurance benefits, people on Medicare are getting more help in covering the cost of their prescriptions and you can keep your children on your health insurance until they reach age 26.

This places a few more patches on the national healthcare quilt.

That's the American way.

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