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Alan B. Cohen, David C. Colby, Keith A. Wailoo, and Julian A. Zelizer, eds., Medicare and Medicaid at 50: America’s Entitlement Programs in the Age of Affordable Care

Eveline Thevenard
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Alan B. COHEN, David C. COLBY, Keith A. WAILOO, and Julian A. ZELIZER, eds., Medicare and Medicaid at 50: America’s Entitlement Programs in the Age of Affordable Care, Oxford University Press, 2015, 370 p., US$ 24.95, ISBN 978-0-19-023154-5

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1“Health care is a right, not a privilege”: on the official celebration of the 50th anniversary of Medicare and Medicaid in July 2015, President Obama hailed the programs as symbols of what he claimed to be a “fundamental American belief1.” While one may see this as more rhetoric than reality in a country where access to care is still not viewed as a right of citizenship, the importance of these two landmark programs cannot be contested. One in three Americans now gets health coverage through either Medicare, a federal program which provides health and economic security to elderly or disabled individuals, or Medicaid, a joint federal-state program which is the main health safety net for low-income people. The two also represent a major sector of the U.S. economy, and together with Social Security they have become part of the social fabric of the nation. However, since their inception they have constituted an ideological battleground over differing interpretations of the nation’s institutions, values, and society, and they have fostered bitter partisan conflicts over the role of government. The fractious debate over the passage of the Affordable Care Act and the ongoing controversy over the implementation of the legislation have turned them into major political issues.

2In Medicare and Medicaid at 50, eighteen scholars from diverse disciplines (history, political science, sociology, economics) with recognized expertise in health policy analyze the two programs, “born as part of the Great Society in 1965, but with different origins, evolutions and philosophies guiding them” (xii), and examine their evolution and expansion over the years, the constituencies they created, and their central role in the politics of health care policymaking. Their broader aim is to look at the lessons to be drawn from the history of the programs for the future of health care in the nation, and for the implementation of President Obama’s signature reform.

3Although each author contributes his/her own perspective on the issues, converging views emerge from this remarkably coherent set of essays which, as the conclusion judiciously points out, perfectly illustrates the policy feedback theory. The two programs have evolved very differently from what their founders had anticipated, largely but not exclusively due to their institutional designs. Medicare failed to become the incremental path to universal health insurance its architects had planned. In contrast, Medicaid did not remain the afterthought, the residual program that its founders had envisaged, but grew enormously even in periods of policy retrenchment to become one of the main vehicles for reform under the Affordable Care Act. And in another departure from the founders’ ideals, the ACA has moved away from the social insurance model as a pathway to universal coverage to include conservative, market based provisions.

4In the book’s introductory chapter, Julian Zelizer looks at the troubled political context surrounding the adoption of Medicare and takes issue with the commonly held view of an era when parties were willing to work across the aisle in Congress to pass legislation. Although nearly half the Republicans approved the final package, he points out that alliances between Republicans and conservative Democrats created great legislative uncertainty about Medicare until the landslide election of 1964 which swept liberal Democrats into Congress. In his cautiously optimistic conclusion, he argues that “contentious origins do not inevitably produce weak programs” (18), and hopes that the ACA will survive its contested birth.

5Several authors examine the factors which led to the demise of liberals’ initial hope to turn Medicare into a universal program on the Social Security model. Rashi Fein, a liberal health economist involved in health policy issues within the Kennedy and Johnson administrations, argues that creating Medicare, a successful categorical program for the elderly, built a constituency wary of any change which might constitute a threat to its interests. In so doing, it considerably weakened the support for national health insurance by eliminating its universalist appeal. "Incrementalism has its political advantages, but it also has its political costs” (52). Jonathan Oberlander and Theodore Marmor show that Medicare’s absence of price controls, intended to accommodate the medical establishment, led to a sharp rise in health care costs in the years that followed its enactment. For policymakers, “by the end of the 70s cost control had become the dominant issue in health policy” (65), and prevailed over plans for expanding access to care. In addition, a loss of confidence in government in the wake of the Vietnam War and the Watergate scandal, a rightward shift in the political climate, and retrenchment policies encouraged the turn to market solutions to provide universal coverage. James Morone and Elisabeth Fauquert seek to explain the evolution of Medicare by looking beyond the design of the program and placing it in broader historical perspective. They ascribe the failure of the founders’ vision to materialize by contrasting the “Medicare Moment,” a narrow window of relative consensus over social change, and the decades which followed, which saw the loss of liberal Democratic influence, the realignment of white voters towards the Republican party, increased immigration fueling culture wars, and rising inequality. As American society grew more individualistic and moved away from the egalitarian ideals of the New Deal, market-based models of health care reform prevailed over social insurance models even among Democrats. The Clinton plan, the contentious debate over the ACA and the contents of the final reform package which failed to include even a modest “public option” reflect this shift from social insurance to neoliberal principles.

6One positive impact of the militant, egalitarian climate of the 60s, according to David Barton Smith, was the impact of Medicare on the desegregation of American hospitals after passage of the Civil Rights Act (title 6 prohibited the provision of federal funds to institutions which engaged in racial discrimination). Smith recounts the role of civil rights activists within the Johnson administration who worked ceaselessly in the months preceding the enforcement of the law to ensure hospital compliance with the desegregation guidelines of the Office of Equal Health Opportunity. As a result, “hospitals became the most racially and economically integrated private institutions in the nation” (35).

7If Medicare did not turn out to be the stepping stone to universal health insurance progressives assumed it would be, both it and Medicaid nevertheless grew over the years thanks to stakeholder influence (several authors note that both programs fueled the growth of the health care industry), public support, and political calculus. Andrea Campbell’s contribution highlights the reasons why public opinion by and large supports both programs, thus preventing major structural changes. Polls show strong overall support for Medicare due to its contributory financing structure and constituency (an earned benefit going to a deserving section of the population), vital, not only to the “independence and freedom” of the beneficiaries, but also of their families. More surprisingly, over the years, as eligibility has expanded and the program has lost its public assistance stigma, Medicaid has also enjoyed growing levels of support. For Keith Wailoo, pragmatic considerations have prevailed over party ideology and led to targeted expansions of Medicare and Medicaid (such as the coverage for end stage renal disease under Nixon, the drug benefit under G.W. Bush, and the children's health insurance under Clinton, among others). The disjunction between small government rhetoric and the realities of policymaking at the federal and state levels also reflect Americans’ perennial ambivalence about government. There is hope that pragmatism will prevail for the ACA too, and that the lure of federal dollars will lead Republican governors to endorse the Medicaid expansion.

8The challenges the two programs have faced over the course of their evolution have largely reflected the paths set by their founders. Jill Quadagno looks at one of the least anticipated consequences of the 1965 amendments: the trajectory of the Medicaid program, whose image has been recast from welfare medicine to mainstream program over the years. Medicaid’s basic framework as a grant-in-aid program has allowed it the flexibility to innovate incrementally and fill in some of the gaps of the health care system. Initially restricted to the recipients of cash assistance, it now covers a broad section of the population, including low-income workers and people with disabilities, and it has become the nation’s main long-term care program. Nevertheless, its ambivalent status persists: access to care can be problematic due to the shortage of providers willing to accept Medicaid patients and their low reimbursement rates. In addition, unlike Medicare, Medicaid’s standing as an entitlement was achieved by a series of court decisions over the years, not written into law. Sara Rosenbaum reviews the landmark cases which created legally enforceable rights for the program’s recipients in the liberal climate which prevailed in the period following Medicaid’s enactment. The right to judicial protection allowed beneficiaries, often through class actions, to challenge the attempts of states in the ensuing decades to deny them access to services they were entitled to. Although Medicaid is now a budgetary and legal entitlement, it lacks the legitimacy of a political entitlement, and as such is weaker than Medicare or Social Security. Its vulnerability might well increase with the litigation over the implementation of the ACA.

9Frank Thompson analyzes the political dynamics of Medicaid’s evolution since its inception through the lens of federalism. The financial structure of the program, with its federal-state matching funds, has stimulated its growth, allowing the different levels of government to split the costs. The 80s saw substantial Medicaid growth through the efforts of the program’s champion in Congress, Henry Waxman, who fought to expand eligibility, as well as those of state actors who resisted funding cuts. Many of the program’s eligibility expansions were initially state options. Under the Clinton and Bush administrations, states were allowed to experiment with innovative methods to improve coverage and reduce costs via the waiver process. But Medicaid has not entirely shed its poor law heritage, and in times of increased partisan polarization, the statutory provisions and flexibility which allowed it to expand also threaten its adequacy as a vehicle for further expansion under the ACA.

10If the evolution of Medicaid has mostly focused on expanding access to care, the debate around Medicare has increasingly focused on containing costs. Policymaking for Medicare has been fraught with major political risks for the proponents of structural reforms, but some significant changes have nevertheless been introduced. Economist Uwe Reinhardt notes that it was ironically under Republican administrations that the federal government implemented strategies to retrieve “the key to the U.S. Treasury” (173) which providers “extracted” from Congress in 1965 to concede their support for the program. In order to rein in the excesses of the health care industry, Medicare pioneered a prospective payment system to hospitals in 1983 which was later adopted across the health care industry and by European countries (it is interesting to note, incidentally, that France adopted its own version in 2005). Medicare has since driven innovation in payment and delivery system reforms to improve quality and contain costs. Several provisions of the ACA, if implemented, should confirm the program’s critical role in these areas. However, political resistance to any serious form of cost control has endured, given stakeholder influence.

11On the other hand, since the mid 90s and the Republican takeover of Congress, the program’s beneficiaries have been offered private insurance options along with traditional Medicare, market competition being touted in conservative rhetoric as more efficient to curb expenditures than government regulation, despite evidence to the contrary. Two of the book’s contributions address the impact of this change on the program’s identity and constituency. Mark Peterson notes that Medicare has now become a hybrid public-private program. Decades of market-oriented reforms of health insurance may have undermined the public’s perception of its social insurance character, and although none of the reform proposals to turn it into a voucher program have been adopted, the concept now seems to have become politically acceptable. Mark Schlesinger analyzes the impact of Medicare on the social identity of the elderly. In its early stages, it empowered them politically, creating a constituency ready to mobilize to defend its rights. Looking ahead, the rise of consumer-driven health care and the privatization of parts of Medicare may alter the elderly’s identification with the program and weaken their incentives to mobilize in order to defend it.

12Judith Feder’s contribution on long-term care insurance (a topic also addressed by Jill Quadagno) is of particular interest since it sheds light on the tensions, contradictions and lapses of health care policymaking in an area where the two programs intersect, but fail to integrate to provide seamless coverage. While Medicare only provides short term post-acute care, Medicaid is the primary provider of long term care services and supports for low income individuals, but it is also the program of last resort for an increasing number of middle class seniors, given the cost of private nursing home care. There are wide variations in quality and access to facilities across the states due to states cost containment strategies. The failure of the long term care insurance component of the ACA, following the failure of previous attempts at providing this benefit, is evidence that the pressure to contain costs prevails over the political will to address this major health policy issue.

13Concerning the impact of Medicare and Medicaid on the ACA, Jacob Hacker argues that it is risky to rely on Medicare to generate savings across the broader system, which the ACA aims to do, in order to finance the expansion of health insurance (mostly via Medicaid) in a budget-neutral fashion. On the one hand, the projected cuts to providers have generated strong resistance from the industry, on the other, the Republican Party has successfully portrayed the ACA’s Medicare provisions as negatively affecting its beneficiaries and mobilized the elderly against the reform, pitting the seniors against the poor. This has led to a shift in the political allegiance of the elderly from the Democratic Party to the Republicans. Successful implementation of the ACA will require bipartisan deals on cost control without alienating the elderly. In the prevailing polarized climate, this is by no means certain.

14Like other contributors, Paul Starr attributes the complexity of the U.S. health system and the enduring divide between the two public programs to the political compromises which allowed their creation. He highlights the uncertain future of the ACA due to three factors: the absence of a clearly defined, politically effective beneficiaries’ lobby; the political polarization over the ACA and the Republicans’ determination to repeal or weaken it; and the complexity of the program and the public’s confusion about the way it affects them. He notes pessimistically, but perhaps realistically, that rights are reversible. Medicare and Medicaid were enacted in an era of “ascending rights” (330), whereas in the following decades, the term “entitlement” gradually acquired negative moral connotations, making the two programs appear as legitimate targets of funding cuts.

15The cautious conclusion of the book underscores the accomplishments, durability and political resilience of the two programs, and their huge social and economic impact on the nation, but warns against undue optimism about their survival under their current form. Medicare’s entitlement status is threatened by its rampant privatization and the burden it represents on public finances. Medicaid’s status is also fragile and could be further weakened if the Republicans’ perennial threat to block grant the program should materialize. Medicare and Medicaid have not only transformed the American health care landscape, they have also become part of American political life and face similar challenges. As a consequence, their future and Medicaid’s expansion under the ACA, as well as the crucial issue of long term care insurance, will be determined by the various forces influencing the policy making process in the coming years.

16Despite some inevitable overlap between a few chapters, the book successfully weaves together the political history of the two programs, their parallel evolution, and their critical role in building the public/private U.S. health care system. It highlights the American tradition of path dependence in social policy and the role of American institutions, government, federalism, and the courts in shaping its development. Interestingly, 2015 also marked the 70th anniversary of the French social security system, one based on the social insurance model. Medicare and Medicaid at 50 provides invaluable keys to understanding why, in contrast to the other’s universalist vision of a welfare state, the tumultuous implementation of the Affordable Care Act bears the legacy of the United States’ bifurcated health care system. If Medicare and Medicaid are causes for celebration for the safety net they provide to millions of Americans, they may also have prevented the passage of broader legislation. The ACA has brought partial solutions and raised more questions. In contrast to the “Medicare moment,” there has not been an “ACA moment,” and the latter’s implementation has been far more contested. Only the future will tell if its contentious origins will produce a strong and durable program.

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Eveline Thevenard, « Alan B. Cohen, David C. Colby, Keith A. Wailoo, and Julian A. Zelizer, eds., Medicare and Medicaid at 50: America’s Entitlement Programs in the Age of Affordable Care », Transatlantica [En ligne], 2 | 2015, mis en ligne le 15 juillet 2016, consulté le 24 juin 2017. URL : http://transatlantica.revues.org/7969

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