Medicare becomes available on July 1, 1966, and Group Health Cooperative begins accepting older patients.

See Additional Media
On July 1, 1966, Medicare becomes available following the signing of the Medicare Act into law by President Lyndon B. Johnson. The new law begins a revolution in health care, but its compromises result in a system that institutionalizes fee-for-service care. This in turn will spur chronic increases in health-care costs, since the system, instead of controlling costs, pays physicians' "usual and customary" fees, which inevitably begin rising. Institutions with an incentive to keep down costs like Group Health Cooperative (where service is provided based on advance payments, not fee for service), are at a disadvantage. Nevertheless, Group Health advocated the reform, works to improve it, and begins accepting Medicare patients.

The bill signed by President Johnson on July 31, 1965, offered the public a "three-layered cake" of health reform baked in the oven of congressional compromise. Part A of Medicare covered hospitalization and some extended care costs on a reimbursement basis through compulsory insurance paid by workers through Social Security. Part B was a partially subsidized, voluntary program to cover physician care. The legislation also established Medicaid, which expanded federal aid to finance health care for the poor through state-administered programs.

Early in 1966, the Group Health Board of Trustees adopted a Part B plan offering Medicare participants full Group Health Coverage for $6 a month. Until this time, Group Health Cooperative admitted to membership only people under 60 years of age. Now the board amended the membership agreement to admit members over the age of 65. Not until 1980 did Group Health admit members between 60 and 65.

Sources: Walt Crowley, To Serve the Greatest Number: A History of Group Health Cooperative of Seattle (Seattle: GHC/University of Washington Press, 1995), 105, 120-122.
Related Topics
Government & Politics Group Health Health
Licensing: This essay is licensed under a Creative Commons license that encourages reproduction with attribution. Credit should be given to both HistoryLink.org and to the author, and sources must be included with any reproduction. Click the icon for more info. Please note that this Creative Commons license applies to text only, and not to images. For more information regarding individual photos or images, please contact the source noted in the image credit.
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License
Major Support for HistoryLink.org Provided By: The State of Washington | Patsy Bullitt Collins | Paul G. Allen Family Foundation | Museum Of History & Industry | 4Culture (King County Lodging Tax Revenue) | City of Seattle | City of Bellevue | City of Tacoma | King County | The Peach Foundation | Microsoft Corporation, Other Public and Private Sponsors and Visitors Like You