Between 1940 and 1946, the number of group and individual
hospitalization policies held by commercial companies rose from 3.7 to
14.3 million.”^9 Similarly, group surgical indemnity coverage grew from
2.3 to 10.6 million policies. There was very little American hospital
construction prior to the end of the year, but the 1946 Hill-Burton Hospital
Survey and Construction Act launched a nationwide hospital boom.
“Between 1946 and 1960, the number of voluntary and state and local
government hospitals had increased by 1,182 ... federal spending under
the program began at $75 million a year in 1948 and rose to $186 million
by 1961.”^10 One critical stipulation of the Hill-Burton Act was that
hospitals (which had received grants) were required to provide free care
for twenty years to persons unable to pay for medical services. For those
initial recipient hospitals that received funds in 1946, it is no small
wonder that Medicare’s activation in 1966 came at just the right time.
The explosion and expansion of gleaming hospitals and the swelling
numbers of insured lives couldn’t conceal the plight of the those “left out
by reason of age or economic status ... the indigent and the
unemployed.”^11 The first group to be seriously addressed would be the
elderly. The Great Depression had ravaged the financial stability of
millions of Americans, and the monumental Social Security Act of 1935
established a permanent national old-age pension system through
employer and employee contributions (still reported in box 4 of your W-2
form). It was natural that President Harry Truman’s head of the Federal
Security Administration (later renamed the Department of Health,
Education, and Welfare, and still later split up into multiple federal
departments) would scheme with his colleagues at the Social Security
Administration that the same program that provided old-age benefits could
be configured to provide healthcare coverage benefits. FSA administrator
Oscar Ewing stated, “The proposed benefits would give [the aged],
through their own contributory insurance system, badly needed and
valuable hospitalization insurance ... that would reduce federal, state and
local expenditures ... and reduce deficits of hospitals.”^12 Just like Justin
Ford Kimball’s Dallas teachers setting aside a little money with each
paycheck as a prepayment of hospital expenses, Ewing was proposing a
system where Americans would prepay money to be used in the event of
sickness as an elder. Uttered in 1951, it would take a decade and a half to
codify into law.