Medicare and Medicaid

1965 - Institutional Event

Because of the explosion in pharmaceuticals and medical technology, hospital costs doubled during the 1960s. Health care insurance for the growing senior population became a key concern of the Kennedy administration.

But it was President Lyndon Johnson who finally signed health care amendments to the Social Security Act in 1965. The new legislation established Medicare, a health insurance program for the elderly, and Medicaid, a program for the poor. The programs were funded by a tax on employee earnings, matched by employer contributions. In its first three years, nearly 20 million beneficiaries enrolled in Medicare.

Information provided by BCBSNC.

The elderly and the poor were hardest hit by rising health care costs in the ‘60s. NC Blue Plans began offering additional coverage to those groups.

President Lyndon B. Johnson signs historic legislation creating Medicare and Medicaid in 1965. President Harry Truman, looks on. Photo courtesy of the Blue Cross and Blue Shield Association archives.

After years of competition, the Hospital Care and Hospital Saving Associations merged into North Carolina Blue Cross and Blue Shield to administer the new programs.