The Man Who Blocked Medicare for Years, Then Built It in One Night
July 29, 2026
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Show Notes
Eddie and Betty's Conversation
Good morning, this is The American Retirement Advisor podcast. I'm Betty, Eddie's across from me, and we are on day three of Ian's Medicare week. I'll admit this is the one I've been most curious about since he laid the week out, because today we finally get a name for the wall.
The wall is the right word for it. Think about where we've been. Monday, Truman proposes national health coverage and gets beaten twice. Tuesday, Kennedy fills Madison Square Garden and loses to a record album playing on coffee tables. Both times the thing runs into the same immovable object.
And yesterday you quoted Kennedy's own aide saying you do not persuade the chairman of Ways and Means with a rally in Madison Square Garden. So I've had a full day now to sit here wondering who on earth this chairman was.
His name was Wilbur Mills. And Betty, if you have ever looked at your Medicare card and wondered why there's a Part A and a Part B, why the thing is split into pieces at all, the answer is one sentence this man said in a closed room on a Tuesday afternoon in March of nineteen sixty five.
One sentence did that?
One sentence, and then a staffer who worked all night.
Before you give me the sentence, tell me who he was. Because I have never heard this name in my life, and you're telling me he decided the shape of a program that tens of millions of people carry in their wallet.
He chaired the House Ways and Means Committee, which is where anything touching taxes or Social Security lives or dies. Nothing reached the floor of the House without going through him first. He may be the most consequential American that most Americans have never heard of.
So not a president, not somebody you'd see on the evening news, and he's the entire ballgame anyway.
He is the entire ballgame. And he had spent years keeping this particular idea in a drawer where nobody could get at it.
Now here's where I want to slow you down. On Monday you promised me nobody in this story gets to be the cartoon villain, and a man who sits on an idea for a decade is awfully easy to turn into one. What was his actual argument?
It's a real argument, and it isn't that older people were doing fine. There was already a program on the books called Kerr-Mills, which sent federal matching money out to the states to help low income seniors. His position was that it deserved a fair chance to prove itself before Washington built something enormous and permanent right on top of it.
Let the thing you already have work before you go replace it. And honestly, you hear a version of that in every business I've ever been around. We already bought the system, let's use it before we buy another one.
And here's the detail that makes it land. He co-sponsored that program himself, back in nineteen sixty. His name is on it. Kerr-Mills. He is the Mills.
Oh, that changes it completely. That's not obstruction, or at least it isn't only obstruction. That's a man defending the thing he built, which is about the most human motive there is. Everybody believes their own solution deserves one more year to work.
Historians describe him as stalling for time in the Medicare debate, and I think that's the fair way to put it. Not fighting it on principle in public, just never quite letting it come up for a vote. And it worked for the better part of a decade, which in Washington terms is close to forever.
So what changes? Because something obviously does or we would not be sitting here talking about a card that exists.
The nineteen sixty four election. Johnson wins enormously, brings in a big new majority with him, and Mills can count. The votes to pass something now exist whether he likes it or not.
So he loses the ability to stop it.
That option is gone. But he keeps something else, and this is the part that matters most. He still controls what the thing looks like when it finally comes out of his committee.
That is a completely different kind of power, and I don't think most people appreciate the difference. He can't block it anymore. He can still build it. And if you can't stop something, building it is the next best seat in the house.
That is precisely the position he's standing in on March second, nineteen sixty five.
Alright. What is actually sitting on the table in front of him?
Three bills. And the thing you have to understand about that room is that everybody in Washington assumed the three were mutually exclusive. You pick one, the other two die. That was simply how it worked.
Walk me through all three, because I want to know who wanted what and why.
First is the administration's bill, called King-Anderson. Compulsory hospital insurance for people over sixty five, run through Social Security, paid for with payroll taxes. That is Medicare the way supporters had been describing it ever since Truman.
And that's the one that keeps getting beaten.
Every time. Second one comes from John Byrnes of Wisconsin, the ranking Republican on the committee and a genuinely respected Social Security expert in his own right. His plan covers doctor bills and drugs instead of hospital stays. It's voluntary rather than mandatory. And it's funded out of general tax revenue and what enrollees pay in, rather than through Social Security.
So what's the purpose of that bill? And let's be honest about it.
To be the reasonable-sounding alternative. To let a member of Congress stand up and say I am not against helping the elderly, I am for this other thing over here. Which conveniently makes the administration's bill unnecessary.
So it's engineered to kill the first bill without anybody ever having to cast a vote against helping old people. That is a very well-built piece of politics, and I mean that as a professional compliment.
Third one comes from the American Medical Association. They have been fighting all of this for fifteen years at this point, and they finally put a plan of their own on the table, popularly called Eldercare. It would expand that existing federal and state assistance program and subsidize private coverage for low income seniors.
The doctors' answer to the question of what we ought to do instead.
And I want to be fair to them here, because after fifteen years of simply saying no, putting an actual plan on the table is a real step. It's the first time they've said here is our version, rather than just not that one.
That's a good catch and I'd have missed it. So count them up for me.
Three bills sitting in front of the committee, and two of the three exist for the express purpose of making sure Medicare never happens.
And the committee's job, as everybody in that room understands it, is to pick one and bury two.
That is what all of them believe they're there to do. Closed executive session, March second. A man named Wilbur Cohen is in the room, one of the administration officials who had been carrying this fight for years.
Okay. Give me the sentence.
Mills turns to Cohen and says, maybe it would be a good idea if we put all three of these bills together. You go back and work this out overnight and see what there is to this.
Overnight.
Overnight. And think about what he's actually asking for. Those three bills were not three drafts of one idea. They were funded differently, administered differently, one compulsory and one voluntary. He's asking a man to reconcile all of that between dinner and breakfast.
Three bills that have been at war with each other for years, and he wants them stapled into one thing by the time the sun comes up. I'd have gone home and cried.
Cohen did it. And the structure that came out of that night came to be known as the three-layer cake.
Who called it that?
Nobody seems to know for certain, and I looked. The Miller Center at the University of Virginia records it as a name the thing came to be called, not something you can trace back to one person's mouth. But it stuck, because it's exactly right.
Then lay the cake out for me. Which bill turned into which piece of the card in my wallet?
The administration's hospital plan became Part A. The Byrnes bill, the Republican alternative, became Part B, and they kept it voluntary specifically out of deference to the doctors' objections. And the AMA's Eldercare approach became Medicaid.
Say the middle one again, because I want to be certain I heard it correctly. The Republicans' bill to stop Medicare is now Part B of Medicare.
You heard it right. The Republican alternative ended up as a limb of the very program it was written to prevent.
And the doctors' bill to stop Medicare became Medicaid.
Became Medicaid. The National Institutes of Health archive of health policy research lays that structure out plainly, that Mills proposed a bill incorporating the essential features of all three of the major pending proposals.
Eddie, imagine being John Byrnes. You write a bill for the specific purpose of making sure this program never exists. You go to bed on March second. And you wake up on the third and your bill is a limb on the very thing you were trying to prevent.
The people who wrote the bills designed to defeat it woke up to find their own work inside it.
I want to stay right here, because this is the most surprising thing in the whole week to me and I want to understand the motive. Was that generosity? Was he being magnanimous to people who'd been fighting him?
I don't think so, and I think the real answer is more interesting than generosity. It was arithmetic. Ask yourself how a Republican votes against a bill that contains the Republican bill.
He can't. Or he can, but now he has to stand up in public and explain why he's voting against his own idea. And there's no good version of that speech.
Now ask yourself how the AMA stands up and calls the package socialized medicine when their own proposal is sitting right there inside it.
They'd be calling their own plan socialism. And after fifteen years of that one word being their entire argument, that is not something you walk back on a Tuesday afternoon.
So he doesn't defeat the opposition. He absorbs it. And in absorbing it, he quietly takes away the ground they had been standing on the whole time.
That is the thing nobody does anymore, isn't it. For fifty three years everybody treated this as a war with a winner and a loser. One plan survives and the rest go in the trash.
And Mills looks at three plans built to destroy each other and decides that none of them has to lose.
I'm not sure I've heard a better piece of political craft in anything we've covered on this show. And it makes me want to ask you something, because now I'm looking at my own card a little differently. Is that why it's confusing?
That is exactly why it's confusing, and I like that you got there on your own steam. Part A and Part B sit separately on the card, they're funded in completely different ways, one arrives automatically and the other you have to sign up for and pay a monthly premium toward.
Because they began life as two different bills, written by two groups of people who disagreed with each other.
Every retiree who has ever squinted at that card and asked why is this in pieces is looking at the fingerprints of a compromise somebody made in one room over a single night in nineteen sixty five.
And I want to sit on that, because in our world this comes up constantly. Ian says in the piece that from the conversations our advisors have, that split is still the single most confusing thing about signing up.
It is. Sixty one years on, it's still the first question out of people's mouths.
But here is what genuinely changes for me today. I always quietly assumed that was bad design. That somebody in an office made it complicated because that's what government does. That is not what happened at all.
Not even close. It's confusing because it was three arguments before it was one program. The seams you're looking at are the places where the fighting stopped.
That's a much more forgivable reason for a thing to be complicated. It doesn't make enrollment one bit easier, but it does make it make sense, and I think people find that oddly comforting.
And it helps in a practical way too, because you stop hunting for a logic that was never in there. You quit trying to work out why it's built like this and you just learn the two pieces and what each one covers.
Alright. Does it pass?
It passes. And tomorrow it becomes law, and it does not happen in Washington.
What do you mean it doesn't happen in Washington? Bills get signed in Washington. That's rather the whole point of Washington.
The president gets on a plane. He leaves the capital entirely and flies out to Missouri to go find a man who lost this fight twenty years earlier, so that he can hand him the very first card.
Truman. He goes and gets Truman.
Tomorrow. And Betty, tomorrow is July thirtieth.
Which is the anniversary. That's the actual day it was signed.
Sixty one years to the day. Ian built the whole week's calendar around landing that episode right there.
That is lovely and I'm not going to pretend I'm not looking forward to it. Let me bring us in. If nobody has ever really sat down and explained to you what Part A covers and what Part B covers and why they behave like two different animals, that is a conversation worth having before you need it rather than in the middle of needing it.
Sixty one years later and it's still the first thing people ask about, which probably tells you everything.
The team at American Retirement Advisors walks families through all of it as part of every plan, at no cost to you. Six oh two, two eight one, three eight nine eight. I'm Betty, that's Eddie, and this has been The American Retirement Advisor. Take good care of each other.