In 1965, the Social Security Act established both Medicare and Medicaid. Medicare was a responsibility of the Social Security Administration (SSA), while Federal assistance to the State Medicaid programs was administered by the Social and Rehabilitation Service (SRS). SSA and SRS were agencies in the Department of Health, Education, and Welfare (HEW). In 1977, the Health Care Financing Administration was created under HEW to effectively coordinate Medicare and Medicaid. In 1980, HEW was divided into the Department of Education and the Department of Health and Human Services (HHS).

The first U.S. President to propose a prepaid health insurance plan was Harry S. Truman. On November 19, 1945, in a special message to Congress, President Truman outlined a comprehensive, prepaid medical insurance plan for all people through the Social Security system. The plan included doctors and hospitals, and nursing, laboratory, and dental services; it was dubbed "National Health Insurance." Furthermore, medical insurance benefits for needy people were to be financed from Federal revenues.

Over the years, lawmakers narrowed the field of health insurance recipients largely to social security beneficiaries. A national survey found that only 56 percent of those 65 years of age or older had health insurance. President John F. Kennedy pressed legislators for health insurance for the aged. However, it wasn't until 1965 that President Lyndon B. Johnson signed H.R. 6675 (The Social Security Act of 1965; PL 89-97) to provide health insurance for the elderly and the poor.

On July 30, 1965, President Johnson signed the Medicare and Medicaid Bill (Title XVIII and Title XIX of the Social Security Act) in Independence, Missouri in the presence of former President Truman, who received the first Medicare card at the ceremony; Lady Bird Johnson, Vice-President Hubert Humphrey, and Mrs. Truman also were present. President Johnson remarked: "We marvel not simply at the passage of this Bill but that it took so many years to pass it."

Medicare extended health coverage to almost all Americans aged 65 or older. About 19 million beneficiaries enrolled in Medicare in the first year of the program. Medicaid provided access to health care services for certain low-income persons and expanded the existing Federal-State welfare structure that assisted the poor.

The 1972 Social Security Amendments expanded Medicare to provide coverage to two additional high risk groups — disabled persons receiving cash benefits for 24 months under the social security program and persons suffering from end-stage renal disease.

The difference between Medicare and Medicaid

Many times there is confusion surronding the differences between Medicare and Medicaid. Let's take a minute to define each of these.

• Medicare is part of the Social Security system and provides health care coverage largely for persons 65 and older (as well as for a few select additional categories as we discussed above).
• Medicaid is a joint State and Federal program, which provides medical care for the financially needy.

Source: Center for Medicare and Medicaid Services (www.cms.hhs.gov) 7/26/04
Source: Medicare information obtained from "Medicare and You 2002".
Source: Medicare Supplement information obtained from "Choosing A Medigap Policy"