The Social Security Amendments of 1960: Completing the Foundation for Medicare and Medicaid

Abstract

The expansion of social security coverage enabled northern, industrial states to transfer a larger share of their Old Age Assistance (OAA) clients to the Social Security (OASDI) rolls at an earlier date than was possible in southern, agricultural states. Due to the differential rate of transferring clients, northern states could achieve a larger financial return from the establishment of Medicare while an increase in federal medical reimbursement for public assistance clients was more beneficial to southern jurisdictions. Although public opinion overwhelmingly supported the former option, partisan presidential politics and a split in the Democratic ranks enabled southern Democrats to thwart the will of the people by enacting legislation that significantly expanded federal contributions for the health care of indigent, elderly citizens. The evidence, therefore, indicates that regional differences in the share of elderly citizens receiving OASDI and OAA benefits contributed to the suppression of Medicare amendments. It is also evident that, in the absence of a presidential veto threat, southern opposition to Social Security health insurance would have been muted and Congress may gave enacted Medicare legislation in 1960 instead of 1965.