Last week we followed a promise that started in 1583 with a London salt merchant and a denied claim. This week I want to do the same thing with the other piece of paper almost every one of our clients owns and almost nobody has ever wondered about. It is a red, white and blue card. It arrives around your 65th birthday, you put it in your wallet, and that is usually the end of your curiosity about it.
The story behind that card is one of the longest and loudest fights in American history. All week we are going to walk through it: the fifty-three year argument, the record album that tried to kill it, the week it finally passed, and the one thing it never covered that still empties estates today.
It starts with a word.
How long did it take to pass Medicare?
The idea of national health coverage first reached a major American ballot in 1912, and Medicare was not signed into law until July 30, 1965. That is fifty-three years. The Progressive Party platform that Theodore Roosevelt ran on in 1912 called for "the protection of home life against the hazards of sickness, irregular employment and old age through the adoption of a system of social insurance adapted to American use." Roosevelt lost. The idea did not die, but for the next five decades it did not win either.
Understand what was actually being argued about, because it was not really medicine. It was a word.
Why the old were the ones left out
Here is the part that most tellings skip, and the part our clients tend to grasp faster than anyone, because they have spent their lives around risk and pricing.
Private health insurance in America grew up inside the workplace. It spread through employers, it was priced for groups of working people, and by the early 1960s it covered most of the country reasonably well. The system was not broken. It was working exactly the way insurance is supposed to work.
That was the problem.
Insurance prices risk. Older people are expensive, and everybody in the business knew it. So when you retired, you left the group plan that had covered you for thirty years, and you walked into the individual market at exactly the age when you were the least attractive customer in it. Coverage was either unavailable or priced like what it was, which is a near certainty rather than a risk.
The numbers show it plainly. According to research published in the Health Care Financing Review, in 1963, two years before Medicare passed, about 75 percent of adults under 65 had hospital insurance. For Americans 65 and over, the figure was 56 percent.
Nearly half of the oldest people in the country had no hospital coverage at all. Not because anyone was cruel. Because the math was the math.
What that actually did to families
I want to slow down here, because this is the part of the story that turns a history lesson into something that belongs on this site.
When an uninsured seventy year old got seriously ill in 1960, the bill did not disappear. It got paid out of whatever that person had spent forty years accumulating. The house. The savings. The small business. And when that ran out, it moved to the next generation, because the children paid it.
So a single illness in old age routinely destroyed two generations of savings at once. The parent's security and the children's inheritance went into the same hospital bill. From the conversations our advisors have every week, that fear has not left the American family. It just changed shape, and we will get to what it looks like now on Saturday.
That is the thing Medicare was built to stop.
The word
On November 19, 1945, Harry Truman sent Congress a message proposing national health coverage. He knew exactly what was coming, and he tried to head it off inside the message itself.
"They will not be frightened off from health insurance because some people have misnamed it 'socialized medicine'. I repeat, what I am recommending is not socialized medicine. Socialized medicine means that all doctors work as employees of government. The American people want no such system. No such system is here proposed."
Read that again with the date attached. In 1945, before the fight had really started, a sitting president was already arguing against a phrase. He could see it out there. He tried to take the weapon off the table before anyone picked it up. You can hear him almost pleading with the country not to fall for it.
It did not work. When Truman pushed again in 1949, the American Medical Association hired a California political consulting firm and ran what was, at the time, the most expensive lobbying campaign in American history against him. Their central move was not a policy argument. It was the repetition of that phrase, everywhere, until it stuck. The Columbia Journalism Review has traced how thoroughly it worked.
Truman's proposal died. He left office having lost the fight completely.
I will say the fair thing here, because this series is going to report this argument rather than join it: the doctors who opposed it were not villains, and their concerns about government control of medical practice were sincere and widely shared. That is exactly why the fight lasted fifty-three years. Both sides believed they were protecting something worth protecting.
But the phrase did the heavy lifting. Not the argument. The phrase.
And here is what makes the whole thing worth a week of your attention. Twenty years after Harry Truman lost, on a July afternoon in 1965, a president flew out of Washington specifically to find him. We will get to that on Thursday, which happens to be the anniversary, to the day.
Tomorrow, though, the opposition gets its masterpiece. In 1961 a vinyl record arrived in thousands of American mailboxes, addressed to doctors' wives, with instructions to invite the neighbors over for coffee and play it. The man speaking on that record later became president. That story publishes tomorrow at 10:30 AM ET.
And if you are approaching 65, or helping a parent who is, the decisions that come with that card are more permanent than most people realize. The team at American Retirement Advisors walks families through it as part of every plan, at no cost to you. Call (602) 281-3898. A card this hard to win deserves to be understood.
You Finished the Series
Up next: The Evolution of a Promise →In 1583 a London merchant insured another man's life, and eleven months later the underwriters tried not to pay. A court made them. This series follows that promise across four and a half centuries: how it became fair, how it grew new tools for new problems, and what it quietly does for families now.
Disclaimer: The information in this article is for educational purposes only and does not constitute tax, legal, or investment advice. Tax laws change frequently, and individual circumstances vary. American Retirement Advisors does not provide tax or legal services. Before making any tax-related decisions, consult a qualified CPA, tax attorney, or financial planner who can evaluate your specific situation.