A Conversation between LBJ and Wilbur Cohen

3/23/1965 - 4:54PM    

C: (2:56) I think it's a great bill, Mr. President.

LBJ: Is that right?

C: Yes, sir, I think that you got not only everything that you wanted, but we got a lot more than--on this thing.  It's a real comprehensive bill.

LBJ: How much does it cost my budget over what we estimated?

C: Well, I think it would be around, I'd say, four hundred and fifty million more than what you estimated for the net cost of this supplementary program.

LBJ: Now what do they do under that?  How is that handled?  Explain that to me again, over and above the King-Anderson supplementary you stole from [John] Byrnes.

C: Yes.  Well, generally speaking, it's physicians' services.

LBJ: Physicians.

C: Yes.  In the office--

LBJ: Alright,.  Now my doctor that I go out and he pumps my stomach out to see if I've got any ulcers, is that physician?

C: That's right.

LBJ: Any medical services that are M.D. services?

C: Any M.D. services.  Now--

LBJ: Alright.  Now how do we know what--does he charge what he wants to?

C: No, he can't quite charge what he wants to because this has been put in a separate fund--

LBJ: Yes.

C: --and what the secretary of HEW [Health, Education, and Welfare] would have to do is make some kind of agreement with somebody like Blue Shield, let's say, and it would be their responsibility, under the way the chairman has provided the bill, that they would regulate the fees, in effect, for the doctor because what he tried to do is to be sure the government wasn't regulating the fees directly.  It shouldn't deal with the individual doctor.

LBJ: Yes.

C: And the bill provides that the doctor could only charge the reasonable charges, but this intermediary, the Blue Shield, would have to do all the policing, so that the government wouldn't have its long hands in--

LBJ: Alright, that's good.  Now what does it do for you, the patient, on doctors?  It says that you can have doctors' bills paid up to what extent or how much or--any limit?

C: The individual patient has to pay the first fifty dollars--

LBJ: Alright.

C: --deductible, and then he's got to pay 20 per cent.

LBJ: Of everything after that?

C: Everything after that.  So if you went to the doctor, and you had a thousand dollar bill, you'd pay the first fifty dollars, then for the other nine-fifty, you'd have to pay 20 per cent of that.

LBJ: Alright.  But that keeps your hypochondriacs out.

C: That keeps the hypochondriacs out, but at the same time, for most of the people, it would provide an overwhelming proportion of their physicians' costs.

LBJ: Yes, sir, and it's something that nearly everybody could endure.  They could borrow that much, or their folks could get them that much to pay their part, even if they didn't have any money. 
  Now, what does it get you on hospital and nurse's home, under the King-Anderson Act?

C: Under the King-Anderson part, you get the first sixty days of your hospital care with a forty-dollar deductible.

LBJ: Yes, alright.

C: With forty--we finally compromised on forty, Mr. President.

LBJ: That's good.  That's good.

C: Then in addition, it has the three other benefits that were in your bill, namely, the home health services, the outpatient diagnostic—and we've fixed that amendment up the way  remember the way the Mayo brothers talked to you and me about?

LBJ: Yes, yes.

C: And then the only one change was for the home health services.  That has to be after you get out of the hospital.

LBJ: That's good.  Alright. 
Now, what do the insurance companies [say]?  Are they still raising hell, mad?

C: Well, yes, I think they are going to go over to the Senate and raise hell on the thing, because, quite frankly, there's no longer any room for the private insurance companies to sell insurance policies for people over sixty-five when you take the combination of hospital care and the physician's service.

LBJ: Yes, okay.  Now I think that's wonderful. (6:48)