Why Medicare Part A and Part B, as Well as Medicaid?

In the years before the Medicare and Medicaid programs were enacted in 1965, various groups had strong ideas about their possible structures. At one extreme were those who believed that Medicare should be a social insurance program covering all health care for the persons covered, on a compulsory basis, financed by payroll taxes, with a public assistance program as a safety net. At the other extreme were those who supported having only a public assis­ tance program. Also involved in the debate was the American Medical Association (AMA), which opposed any program, whether social insurance or public assis­ tance, if the plan were compulsory, on the grounds that this would eventually lead to socialized medicine. The final legislative process was a matter of political compromise and was not by any means dictated by actuarial principles. Those who believed in the full-social-insur­ ance approach generally supported a plan called the King-Anderson Bill. They attempted to gain the support of other groups by limiting their proposal in various ways. For example, it was proposed that physician services (other than those pro­ vided by hospital staff) be covered only for inpatient surgery. Also, coverage would, as a compromise, be limited to persons age 65 or over. At no time was it provided that out-of-hospital prescription drugs would be covered, primarily because, at that time, such costs were quite low and were seldom