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How did Medicare come to the USA anyway?
The frightening history of Medicare is revealed in the first section of Code Blue. We are indebted to Dr. Edward Annis for so eloquently telling this story. Dr. Annis was a spokesman and a President of the American Medical Society. -- A master of debate -- he knew the history and ideology of the opponents of the free market solutions in medical care. Code Blue is now out of print, but available through several dealers. We recommend purchasing it through www.AbeBooks.com a great resource for out of print and hard to find books. Across from the excerpts, we've provided a quick outline. We know you're busy -- but scroll through this outline before you leave here. Toward the end you will recognize names of those who are still major players in the political warfare over the control of health care.
Excerpts (page numbers refer to page numbers in Code Blue)	Outline
Shortly after the turn of the century, a sister organization to the British Fabian Society was founded in New York called the Intercollegiate Socialist Society (ISS). It later became the League for Industrial Democracy (LID), drawing from the title of the socialist treatise, Industrial Democracy, by Sidney Webb. P. 24.	1900 when socialism was new and fashionable
Webb also initiated the Fabian program called "permeation" – the infiltration of all major political parties to make certain socialist programs would be enacted no matter which party was in power. Sidney and Beatrice Webb wrote their final work in 1935, Soviet Communism: A New Civilization, extolling the virtues of what they asserted was the model socialist society in the Soviet Union. P 23.	1935 Soviet Union: a model socialist society?

[In the US....]..., the Socialists, frustrated by the exposure of subversive activities and by rejection at the polls, had fashioned a scheme of "permeation" after the example set by the British Fabian Society. The Union for Democratic Action (UDA), named after a similar Fabian "permeation" group in London, was formed in 1941 by members of the Socialist party, including prominent party leader Alfred B. Lewis, and members of the LID. P 25-26.	A useful socialist method "Permeation"
Then, in 1947, reeling from election losses in both houses of Congress to the conservative Republicans, the Union for Democratic Action underwent an incredible metamorphosis. Not only would the group be anticommunist, it would no longer be recognizable as socialist. This sudden feat was not accomplished through any mind alterations on the part of the membership, but through a name change, or more descriptively, through a rebirth. The old organization would be dissolved overnight and a new organization formed, retaining the same membership, but called Americans for Democratic Action.	1947 ... "socialism" no longer tolerated in USA. Need to disassociate from the term.
A special meeting was called to reorganize the Union for Democratic Action on January 3, 1947, and the following day labor leader Walter Reuther of the United Auto Workers met with a small group to prepare a policy statement for the reborn organization. ....... Written with glib professionalism, parts of that press statement came out sounding more like a coalition platform of the two major parties than the product of a group carrying forward the socialist traditions of the past half century. "These policies are in the great democratic tradition of Jefferson, Jackson, Lincoln ....." And: "We reject any association with Communists or sympathizers with communism..." With the stroke of a pen, the organized socialists of America had exorcised their immediate past and were "born-again" as patriotic "liberals."	Americans for Democratic Action, Labor Unions & socialist roots
... Thus, what the ADA promoted over the years were policies under which private citizens could, at least symbolically, conduct private enterprise, but government would be empowered to regulate that enterprise through infinite federal and state bureaucratic controls. P. 28.	ADA would promote private ownership with lots of government regulation
Permeation had still, however, to overcome some early obstacles; dissolution of a fifty-year alliance was not easy. For one, the purse strings to leftist causes were held by labor union bosses with access to membership dues, and many of them retained procommunist, pro-Soviet sentiments. These moneyed forces felt more comfortable operating under the old order of the united front, originally established by the worldwide socialist alliance of the Second International. P. 28.	A question of $

A bill for national health insurance was originally sponsored in Congress in 1943 but it quickly fizzled in committee when President Roosevelt refused to endorse it because he said it would lead to socialized medicine. [Later,] Truman would address Congress with an eleven-item wish list, and .... eight of those items would appear on the platform adopted at the ADA annual convention..... the most sweeping proposal on that wish list and on the ADA platform was a renewed call for socialized medicine through national health insurance ... the same proposal had first appeared two decades before on the platform of the Socialist party of America. P 32	1st National health care bill rejected by FDR
Truman’s maneuvering worked wonders. The CIO executive board changed tack to support the Americans for Democratic Action, and at the first ADA convention at Philadelphia in 1948, the meeting was jointly run by William Green, president of the American Federation of Labor (AFL), and by founding ADA member Walter Reuther, who as head of the United Auto Workers represented the CIO. Even the Railway Brotherhoods had come on board.	$ issue solved. ADA's growing political power base
Affective permeation was at hand. The Americans for Democratic Action had laid claim to the huge union war chests paid out of workers’ paychecks – most of whom had never even heard of the ADA and knew little about the Socialist party from whence it descended – and the president of the United States was beholden the to the born-again "liberals" of the ADA for his political survival in the general election of 1948. .... seventy-nine representatives to the U.S. Congress who had been endorsed by the ADA were elected, and nine new House members were actually ADA members ... five ADA-backed U.S. senators and four ADA-backed governors were elected. The big prize for the ADA was the election of Hubert Humphrey to the U.S. Senate. P 33.	$ issue solved. ADA's growing political power base
[re: Truman]...I cannot believe that the man who pulled off the most stunning upset victory in American electoral history – the same president who brought together the Marshall Plan, NATO, and the United Nations to stabilize a volatile postwar world – could neither coax nor cow a Democratic Congress to accept his own campaign platform unless he wasn’t truly interested in seeing those left-wing ideas become law. Most of the ADA’s proposals died in Congress, with the notorious exception of the federal housing fiasco. The ADA’s socialized health care measure never made it out of committee, and for years to come Americans would enjoy the finest health care mankind had ever achieved; delivered efficiently at affordable rates; available to all regardless of ability to pay. P 33-34.	Truman could have pushed a socialized medicine plan, but didn't. He had learned the lessons of the marketplace during the post WWII price controls.
George Bernard Shaw, the Fabian playwright, once described permeation as "wire-pulling the government in order to get socialist measures passed." Those who pulled the wire s at the Americans for Democratic Action learned something else from their Fabian mentors: the doctrine of gradualness. The Encyclopaedia Britannica explains that according to the Fabian doctrine of permeation, as opposed to communist doctrine of sudden revolution, socialism would be achieved "without breach of continuity or abrupt change of the entire social tissue."	Another useful socialist method "Gradualness"
The next attempt to socialize medicine would not be to socialize the entire system at once, but first to socialize the minority of the population that utilized the medical system most often– the elderly. Few would suspect that by offering government financed medical care to the aged, the government would be assuming the medical bills for those who consume one-third of the nation’s total expenditure on health care, and that that total would soon grow over 40 percent. Few would suspect that by this arrangement the federal bureaucracy, which would govern the health care providers of that minority population, would in reality be regulating the entire industry– every hospital and every doctor – because no provider could survive without serving a population that consumes a third of the industry’s production.	Focus on one segment of population. The elderly (the ones who need the most health care)
It was against the articulate spokesmen for that proposal, Senator Hubert Humphrey and labor leader Walter Reuther, that I would find myself debating on national television. The debate still rages today because the goal of complete socialization has not yet been achieved. But few realize that the economics lesson learned by President Truman when he attempted to regulate consumer markets following World War II is the same lesson that begs to be learned in the medical marketplace today. P 35-36.	Hubert Humphrey & Walter Reuther

[up until 1950]... the American Medical Association devoted itself solely to the education and ethics of physicians and avoided any participation in the matters of a political nature; the only publicity in which the AMA engaged concerned the promotion of public health standards and public education on healthy lifestyles. [in 1947] the cost of health insurance through Blue Cross-Blue Shield at that time was about the same per day as a pack of cigarettes or a bottle of beer. P 38	The AMA's policies to help everyone who needed help to get medical care.
But the policy of the AMA was also to make certain that anybody who needed medical care could get it whether or not he or she could pay for it. The AMA therefore encouraged voluntary health insurance for those able to pay, and worked with government to assure that the finest facilities would be available to treat those who could not. p 40
[in the late 1950's] Patrick McNamara, a chief of the pipe fitters’ union in Detroit who had been elected to the U.S. Senate, was conducting hearings around the country to investigate alleged medical neglect of older Americans in support of a renewed socialization effort in Congress ... I thought at the time that this would prove interesting because I knew nobody of that description. ... The audience had been brought in by chartered buses from local nursing homes–all senior citizens on an outing, all well rehearsed by the front men who cued them when to applaud. McNamara called his star witness, a sweet, gentle, elderly lady who lived in a Protestant nursing home. She testified that her only source of income was Social Security, and that her only child was a daughter in Ohio, who, with her husband and children, did not help in her support and care. In response to a carefully worded question by Senator McNamara, she said that if the need arose, she would not be able to pay for a hospital or a doctor.	Hearings & TV. Using the elderly to promote a socialist agenda. & The Gentle Lady
[when then asked, during the hearing, by the author] if she had ever undergone surgery, she confirmed that she had ... if she remembered her heard doctor, she said that she did ... if asked if the doctor had sent a bill,....she said no ... she had not gotten a bill . [She had received no bills, neither from the hospital, the surgeon, the anesthesiologist or her doctor, because ....] under a program — and similar programs that had been established in the other states– the state reimbursed hospitals, and the doctors of Florida provided their services without charge to anyone who could not afford to pay. This program had been in force for more than twelve years at the time and it worked well. P 45-46	States had programs already working for the health care of the elderly & the poor

At previous hearings I had testified that the records indicated only 4 million of the nation’s 16 million elderly would have difficulty meeting medical bills, if, that is, they ever received them. (would again question the wisdom of creating a federal program to provide "free" health insurance to all the aged, and ask, whether they would use the same logic to provide "free" food, housing, and clothing to all 16 million if it could be shown that only 4 million had difficulty paying for these necessities.) P 48.	Citizens faced same government nonsense 50 years ago as we are facing now.
Before leaving office, President Eisenhower had signed into law a bill that was supported by the American Medical Association known as the Kerr-Mills legislation, named after its sponsors in Congress. It provided federal matching funds for state-administered programs helping the aged who could not afford costly medical care. It provided federal funds at a 50-50 ratio for wealthy states up to a split of 85-15 for poorer states like Mississippi, and it did not require beneficiaries to be destitute, only that they be unable to afford private health insurance.	The free market plan for health care: the Kerr-Mills bill became law!!
The only possible explanation for the vehement opposition to Kerr-Mills was that it would not lead to full socialism. Kerr-Mills drew the line at helping those who needed help and allowed states the flexibility to meet local needs. Since administration of Kerr-Mills was not centered at the federal level the bureaucracy would be unable to exert governmental control.	Why didn't the Kerr-Mills LAW get the attention it deserved???
[In the Kerr-Mills law, the beneficiaries had to demonstrate a need in order to qualify for government aid; it would be managed through the State governments, it had already been set up in 33 states and was just waiting for State legislatures to fully ratify it in the other 25 states; various bills promoting national health care and a socialized systems had been brought before Congress, the last was the Forand bill, which died during Eisenhower’s administration.] ....When the new Congress convened, [the socialist version] was resurrected under the sponsorship of Senator Clinton Anderson of New Mexico and Representative Cecil King of California......	The socialist plan: The King- Anderson Bill - which eventually became that which we now know as Medicare
King-Anderson was exactly described by Dr. Leonard Larson, president of the American Medical Association at the time of its introduction: "[The administration’s medical care proposal, if enacted, would certainly represent the first major, irreversible step toward the complete socialization of medical care . . . The King Anderson program does not provide insurance or prepayment of any type, but compels one segment of our population to underwrite a socialized program of health care for another, regardless of need."
... The King-Anderson, which became known as Medicare, required workers of that day to pay for the health care of 16 million senior citizens who had not paid a nickel into the system that would support them, the vast majority of whom were self-supporting and paying their own health bills (7.7 million already had their own private health insurance; health insurance was itself a relatively new concept).

Since it was impossible to argue that the proposed legislation would in some way benefit the workers of America, the union leadership embarked on a smear campaign against the American Medical Association to discredit its opposition to King-Anderson. Union bosses organized and financed the National Council of Senior Citizens, and labor’s obedient lackey in Congress, Aime Forand, became its first chairman in 1961 after leaving office. The press made it sound as if the 2 million members of the National Council of Senior Citizens favored King-Anderson, but in reality the "spontaneous" support was just a political campaign launched by the union bosses and paid for with union dues. If ever there was legislation not in the best interest of union workers, that legislation was King-Anderson, i.e., Medicare.	Union's organized & financed a National Council of Senior Citizens
The AFL-CIO through its massive political war chest financed by the dues of its members– and of nonmembers who worked for unionized firms and were obligated to pay dues under the law– also created the Committee on Political Education (COPE)..... commonly known that Walter Reuther ruled COPE. In 1960, COPE published and distributed a series of lies and misrepresentations about the American Medical Association, and the lies were aired by the mainstream press throughout the country without a trace of documentation. P 57.	Union's Committee on Political Education
[there is quite a story here about Walter Reuther and the author’s attempts to address union members. At one convention he followed Walter Reuther at the podium ] ... in his closing remarks he advised the assembly that a doctor would be addressing them and that they must be courteous, but not to pay too much attention because doctors don’t tell the truth about some things. Fortunately, they were not paying much attention to him, for when I concluded I got an extended standing ovation, with the crown chanting, "come back, come back." But the union bosses never allowed me to come back. P 58	Freedom of speech?
Reuther was at the forefront of the movement of American leftists to disavow Communists. Not only was he clever enough to realize that the affluent and patriotic American worker would not knowingly revolt against his own freedoms, he also knew that organizers of Communist fronts were expected to take marching orders from the Kremlin and execute them with military discipline. And Walter Reuther was clearly destined to give orders, not to take them. Arthur Schlesinger, Jr., who worked with Reuther in the ADA, once prophesied of him: "Walter Reuther, the extraordinary able and intelligent leader of the United Auto Workers, may well become .. The most powerful man in American politics." That prophecy came true in the decade of the 1960s, and the people of America never even elected him to office.	Arthur Schlesinger & Walter Reuther
Of all those involved in the struggle to pass King-Anderson, Walter Reuther wielded the most weight. He was the chief orchestrator of the campaign through his position in the Americans for Democratic Action and the AFL-CIO, and most importantly, through his domination of the federation’s political battery, COPE. He never held public office, he never needed to; he just told the politicians what to do and they did it. Through his clout, he decided which politicians would get into (and out of) office, including the president himself, and which laws would be passed. P 60.	AFL-CIO

[On February 9, 1961, the author debated Walter Reuther on "Face the Nation". Senator Everett Dirksen later congratulated him on the debate and said that the author was the first person he ever saw [to] shake a finger at Walter Reuther and say, "Mr. Reuther, that isn’t true and you know it!" p 61	Power in 1961
Dr. Larson, president of the AMA, had tried repeatedly during those months to gain a private audience with the president of the United States, but to no avail. Nobody understood the White House refusal to meet with the opposition during a heated campaign over proposed legislation, so I asked Senator Smathers, who was on good terms with John Kennedy, to intercede. A meeting was set up for the Oval Office and I went with the delegation that included Drs. Larson .... The president greeted us in his magnanimous manner; in no way condescending, he was just as straightforward and likeable as the guy next door. On his right side sat HEW Secretary Ribicoff and on his left another bureaucrat from HEW. [The conversation is repeated in more detail on p 62-63] JFK did not want to debate Dr. Annis over the King-Anderson "problem", told him to "debate Secretary Ribicoff". The author].... was frankly baffled by his refusal to exchange ideas on King-Anderson. This is not the way a man who feels strongly about a subject responds, especially a president of the United States. P 62.	Meeting with John F. Kennedy & Dr. Edward Annis
[In March of 1962 King-Anderson had been given top priority at a Union convention]– the union bosses wanted to force it to a vote in the Senate because they were losing ground in public opinion. [A huge campaign to speak in favor of King-Anderson was launched] An atmosphere of national crisis had been contrived, and the campaign would culminate with a nationally televised address by President John Kennedy at New York’s Madison Square Garden on May 20, 1962.	King-Anderson bill given top priority at Union Convention.
[The next part of the story cannot be fairly told by excerpts, we can only encourage you to obtain the book. The Madison Square Garden show included bus loads of senior citizens, once again on an outing from the nursing homes, hosted by the Unions and equipped with signs expressing support for the King-Anderson bill. But the president’s speech, reported later in The New Yorker before a capacity audience of 20,000 old people was one of the worst speeches of his career. Evidently Kennedy did not want Medicare but could not say so publicly. Instead it seems that in that famous Madison Square Garden speech he was perhaps trying to send a message to anyone who would understand.... ]	JFK & the Madison Square Garden speech. A message???
[Dr. Annis, the author’s follow-up speech was aired the next evening from the abandoned setting of JFK’s Madison Square Garden speech of the night before]. Pp 64-71.	Dr. Edward Annis Madison Square Garden speech

On July 17, 1962, with all one hundred senators in attendance and Lyndon Johnson presiding in case of a tie, the vote was 52 to 48; we had won, King-Anderson was dead. P 72.	King-Anderson bill again defeated!!!
*[The alternative to socialized medicine - already implemented in 44 states, the "Medicare" King-Anderson bill had been defeated – what happened??]*
As president-elect of the American Medical Association, as president, and as past president, I worked hard to have the states implement the Kerr-Mills law. I worked closely with Congressman Wilbur Mills and other to make the program more effective, and I met with the governors and addressed the assemblies of several state legislatures. We were successful in implementing the program in 44 states and we had every reason to believe the remaining six would come on board. P 72.	The free-market health care plan - The Kerr-Mills Law - already implemented in 44 states and working. WHAT HAPPENED??
Working with the American Hospital Association, the American Dental Association, and Blue Cross/Blue Shield, we devised a simple plan whereby states would use federal matching funds under Kerr-Mills to supplement–on a sliding scale according to income–private insurance premiums for those unable to purchase health insurance on their own. The AMA also sought tax credits–again on a sliding scale according to income–to allow individuals who earned too much to qualify for outright subsidies, but who were still of modest means, to purchase health insurance without hardship. These programs were designed to serve the needs of people who were in need without expanding the role of government beyond its intended purpose and without heaping an unnecessary tax burden on working people. The programs encouraged people to be self-sufficient to the best of their abilities, and beneficiaries could choose their doctors, hospitals, and appropriate care. The programs also kept bureaucratic administration to an absolute minimum.
With ample public support, the future looked bright as medicine surged forward with new technologies, new medicines, and new methods. Then, suddenly, our nation was struck a blow from which we have not fully recovered. Lee Harvey Oswald, a strange and sullen American communist, whether working alone or in collaboration with others, assassinated President Kennedy on November 22, 1963.	JFK ASSASSINATED

Some time after the assassination, I was on an airplane when I came across and Esquire magazine, the cover of which featured a photograph of John Kennedy with tears on it, someone else’s tears. Inside was a long and thoroughly engrossing article by Tom Wicker a close friend of the fallen president. Near the end he told of some of the things Kennedy was politically obligated to do as president, but which he did not have in his heart to do. As an example he cited Kennedy’s speech in favor of King-Anderson in Madison Square Garden. P 73.	Some of the things Kennedy was politically obligated to do as president, but which he did not have in his heart to do. The message...
To overcome the public opposition to King-Anderson, President Johnson told his fellow Americans that of all the events in the short life of their sorely missed John Kennedy, the defeat of King Anderson was the most disheartening. Riding a swell of mournful tears in the media, Johnson rubber-stamped the King-Anderson bill through Congress in the name of the "Martyred president."	LBJ and the rubber stampers in Congress. King-Anderson bill passed.
Within just a few short years the cost of Medicare exploded, as predicted, and the cost of medical care in general accelerated, as predicted. In 1968 the Tax Foundation (a private citizens’ organization) reported that in the two years since Medicare went into effect, medical costs for the nation had doubled.	Medicare costs double.
Seemingly before Lyndon Johnson’s signature had time to dry on the new legislation, Walter Reuther stood before the American Public Health Association in November 1968 at Detroit and proclaimed a health care crisis in America, blaming private medicine for the escalating costs. He demanded complete federal financing of health care for all Americans to be administered by the federal bureaucracy, and announced the formation of the Committee of One Hundred for National Health Insurance, of which he would be chairman. He enlisted his most faithful rubber stamp in Congress, Senator Edward Kennedy, who professed to be deeply concerned for the health of Americans. And the renewed campaign for socialized medicine for all was on ...........	Senator Edward Kennedy and Committee of One Hundred for National Health Insurance.
If you want to know how the story continues -- follow the Clinton Administration's activities and Ted Kennedy's bills. And check out the ADA website: adaction.org. Despite the obvious failings of socialized medicine in England, Canada and elsewhere, they're still promoting it strongly for the USA. Dr. Annis, now in his eighties, continues to speak and write on these important subjects -- quoting him from his current article in the Medical Sentinel, available at the aapsonline.org & Haciendapub.com sites: "DOCTORS, WAKE UP!" And in our own words: CITIZENS, GET TO WORK & VOTE WITH UNDERSTANDING!

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