a dues-paying member. and they have just become so left leaning, it's very difficult. host: okay. all right. what about this perception? guest: i take it very seriously. the reason i enjoy talking to folks is it's wonderful to hear that somebody is getting something of value and it's making a difference in their life. that's a positive story. equally, i do respect these views and we work very, very hard to ensure that no one group or ideology owns public media. so i think within a day of listening and viewing, there are things you will like and things you won't like. but we try for ultimate transparency and accuracy.

host: what's next? how do you adapt to the new world, the new technology? guest: really, we've been focused on this for a while. and i'd like to say, suddenly, the audience wasn't where they were last time. they were going, not sitting on the couch. our investment has to be to keep up with our audience and to make sure the content goes with him when, where, and how they want it. that's a big focus. to keep us on this track, we created a strategic framework and how we're funding. we call it the three d's. digital, diversity, and

dialogue. the community is our partner, they want to be served. and we are really into the ability to really have the audience as our partner. so in a way what has happened is we've come from broadcasting, pushing out, and whether you like it or not, all of us now in media have a very interesting new partnership, collaboration with people, people who been calling c-span, who have informed opinions and really they shape, help to shape, how you go forward. so it's an exciting time because of technology. host: patricia on july 30th,

1965, president johnson signed into law the medicare and also signed into law the medicaid programs. coming up, we'll discuss that about tom scully. that is right after this news update from c-span radio.

host: we're continuing our look here in our last hour of the washington journal on lyndon johnson's vision for a great

society. we want to talk next about medicare and medicaid. joining us is the former administrator for medicare and medicaid services, tom scully. what was going on in the 1960s and even before that that president johnson saw a need for medicare and medicaid? guest: well, a lot of people who are low income people and people with no healthcare coverage, the outcry at the time was to cover seniors which medicare now covers 55 million seniors and disabled people. but that was the outcry. medicaid at the time was somewhat of an afterthought. but it was more low income healthcare general and medicare is generally for seniors and

disabled. medicare has changed senior's lives much for the better. host: according to pbs and aarp, the medicare act of 1965, 44 percent of seniors at the had no healthcare coverage. that year, more than one in three americans were living in poverty. was it a success, tom scully? guest: there's absolutely no question it was. it's changed lives. i was very involved much better including the drug benefit. you can debate the financing, who pays for it and how it gets covered and whether some people should be paying more or less but there's no doubt that medicare's changed senior's lives in a massive way and disabled people's lives.

it's been a huge success. host: what is medicare? guest: medicare is a program that covers 55 million seniors and disabled. you have to be over 65 or disabled by social security disability. about 8 million people have that i think. and it essentially covers -- it has significant deductibles. generally your hospital deductible is about 12 hundred dollars if you're a senior and if you go to a doctor, you pay the first 150 dollar. but it's a fairly thorough insurance program that covers senior healthcare and now as of ten years ago, covers a drug benefit, medicare part d. it covers the bulk of senior healthcare cost.

right now a lot of it comes out of their social security check so they don't even see it. so the benefit costs about 12 to 13 thousand dollars a year per person and seniors pay about 10 percent of that. obviously they pay taxes their entire lives to finance that but it's a very effective plan that's changed seniors lives for the better. it is the biggest healthcare payer in the country. the average hospital probably gets about 50 percent of their revenue from senior healthcare. host: and what about the portion of it that is for those with disabilities? guest: it was determined people with long-term disabilities, there was generally a waiting period once you get on social security disability of two years

unless you had lou gehrig's disease. there's about 8 million people that are disabled and get medicare benefits that are not yet 65. host: you said that medicaid was sort of an afterthought during the debate in 1965 about creating medicare medicare. why do you say that anticipate what did they form when they formed medicaid. guest: at the time medicare was passed, medicare was the big debate, it was a health insurance plan that was thrown together. so you had medicare part a and b which doesn't look much like a modern insurance program for the most part. but at the time the chairman of the ways and means committee put

this together and was trying to find a way to keep everyone happy. that's how they ended up with medicare. at the same time, they thought there were a lot of low income people that also had low coverage and we should have a basic benefit for them and i believe the first year medicaid was passed in 1965, the spending was about a billion dollar a year and this year, it will be over 500 billion. so it was a small plan trying to get into helping poor people and it's become the second biggest program in healthcare. one out of five americans is on medicaid now and at the time i think it was projected to be four or five million people.

obviously these are very big programs. medicaid was envisioned to be a relatively small program and substantially expanded. and president obama's healthcare is obviously going to expand it more. host: so the president under the affordable care act asked for the expansion of medicaid. some states have done so. others haven't. this discussion today is about the creation of medicare and medicaid in this country. under president johnson, his vision for a so-called great society. stephanie, you're up first. caller: i think a lot of the social security disability is for military, people that come back from the military who have

ptsd and all the other military stuff. and i think that should be on the military budget because that's part of the consequences of military engagement. and that shouldn't be in the regular social security disability. and another thing about the social security disability is i saw people -- these companies are dumping employees that they don't want and they're calling them disabled. i've met employees who say i didn't want to retire. i had no -- and the company said that -- the company told somebody that i had brain fog or some stupid thing like that and made them go on to social security disability. so i think this has become a dumping ground for companies to dump employees that they don't want. host: tom? guest: most benefits are covered by the va. some eventually do get social security disability.

certainly a healthy debate over the last couple of years about the disability roles. i think some would argue that there are a couple of million people on disability that shouldn't be there. but if you are disabled, if you have als or kidney dialysis or other things, there are people that really did need them. the issue is it's a great package of benefits for people who really need them. i think very few of the people on disability are actually veterans. most of that is covered through the va. i think certainly there's a perception problem that there

are people who are on disability who shouldn't be on there but it's probably about ten percent. host: karen in florida. caller: hi, tom. i was growing up before medicare came in, and in the state of new hampshire, and the seniors were in kind of dire straits. they were living below poverty or at poverty levels and when medicare went through, it made a tremendous difference but firm correctly, it was also coupled

with a raise in their social security rates. so really the whole program of the great society listed a lot of seniors out of pave -- lifted a lot of seniors out of poverty. right now, i care for my mom. she's 91. and with medicare and luckily my father had been a civil servant, so we have blue cross, blue shield. i can take my mom to any doctor i need to. so i think people need to realize that this program has made it possible for seniors to live out their years in dignity. guest: i agree. it's a great program and it's done a lot of wonderful things. it's there to protect seniors who don't have the resources and support themselves. i don't think it's a great idea

to subsidize a wealthy man in florida. same thing with disabled folks. if they're truly needy, it's a fabulous program. you got 9 million seniors who get medicare and medicaid and they are the most needy. on the other hand, somebody who is wealthy, should we be paying taxes for them to get those benefits? these are the public policies we need to have. no doubt medicare is a great program. host: what percentage of medicare beneficiaries make up the wealthy people or the people that have enough savings that you're describing? guest: not that many. probably 60 percent of people on

social security have income. most seniors don't have a lot of income. i believe social security and medicare should be there to help people who need help. i paid social security and medicare taxes all my life. when i got to be 65, i don't think i'm going to need those subsidiey subsidies and i personally don't think i should get them. these are in the federal budget and the taxes we pay and we should be supporting people who need help and not those who don't. there's very few people these days who would debate that medicare is not a great program. the issue is who should be getting the benefits. once you give people benefits, they generally don't want to give them back whether they need them or not. host: what are you suggesting then, a cap?

guest: no. there's a debate about how high you should expand medicaid, to what level of income and the issue is what level do you subsidize people. i'm not the biggest critic of the aca. the issue there is the aca expands subsidies of healthcare to 62 percent of americans. i have a big problem with that. you just can't fundmently do that. -- fund fund -- fund mentalf y

guest: the right thing to do is expand medicaid to poor people. the issue is medicaid which is the low-income program which is now $500 billion a year. expanding medicaid to low income people is probably the appropriate thing to do. the issue is what level should you cover it? i think people who are relatively poor should get it. the issue here is the program is broken. there are no rules.

every state fudges. new hampshire does not put one penny in its medicaid program and it's a financial and fiscal disgrace. there are no rules. every state handles it differently. i think those people should be covered but there should be a debate over how it's handled. every state has basically come up with a clever way to handle it. no one can explain how it works. some southern governors don't want it covered because some conservatives don't want to spend the money. some democrats say you have to expend it to everyone in america because it's free. it's not free. it's paid by us, the taxpayers.

we should have a serious debate about fixing medicaid. then i'm all about covering poor people and that's what the president had in mind. but you have to have a debate about how to make that program run. it's a total disaster structurally. caller: i was interested in finding out more about a push -- i think it was dick army and someone else from congress who were looking into opting out of medicare. and at some point it was linked with social security so that if you opt out, you don't get your social security. there isn't really an option to opt out apparently and given some of the changes in the cuts and billions of dollars from aca, accepting medicare and i'm

watching this with my parents, the rules are constantly changing. if people want to pursue a different kind of health insurance after 65, why are we not permitted to do that? guest: you can. you can opt out. very few people do because it's such a good deal. it's economically not a smart move for most people. but you can opt out of part b which is voluntary. 99 percent of people take it. part a is financed by social security. everybody pays 1.45 percent payroll tax and your employer pays the same for your whole life which finances the part a side which is hospitaled.

there is a private insurance part of medicaid which is called medicare advantage. i think 40 percent of people in western pennsylvania do that. that's a growing option. when i took under the program 12 years ago, it was just 14 percent and now it's 31 percent. that's a growing option that a lot of seniors are taking. low income seniors because it's -- there's no deductibles and copayments, it's generally a

cheaper option for most people. host: tom scully was the cms administrator for 12 years. he's talking to us from new york this morning. on the issue of medicare, the national committee to preserve social security and medicare has put together the top ten reasons americans love medicare and number seven, medicare is efficient. only 1 percent of traditional medicare spending is overhead chaired to 9 percent for private insurance. do you want to weigh in on that? guest: that's completely and totally wrong. you know, i'm trying to be objective. medicare is a wonderful program. it's incredibly efficient.

basically it's a single-payer system where the government pays every hospital in toledo and every doctor the same thing. so when you fix problems, there's value. they pay every doctor $50 for a hospital business and every hospital $5,000. so what's happened over the years is the government is basically -- administrative dollars, they spend one percent of writing checks. so doctors and hospitals just compete on value. and what's happened in every other system in the world where you fix prices and that's very inefficient and what's happened is the government has started to go to private insurance companies and say we'll give you the money, you can spend, and their overhead is roughly about eight or nine percent but you

can pay doctors differential. what's happened is it's driven a lot more competition in the system. the biggest payer in the country is medicare. what you're really doing is saying instead of having you write checks with a price fix mechanism, let's give you the $14,000 a year. you can make a five percent profit. i believe that's turned out to be far more efficient because when you put them at risk and say if we give you $14,000 and your money is at risk, you're

going to find the better doctors and drive better behavior. it creates better incentives. when you fix prices, you get what we've had. it's absolutely the wrong argument. you're much better off with well-regulated, at-risk private insurance companies running this plan. and fix prices and try to stay ahead of the game or i can just contract with a blue cross plan and give them a reasonable margin and i get much better

results. so you've seen a big move forwards private health coverage. there's no government program in there. they're all private insurance plans competing for these people and that's a better way to go and that's why healthcare costs are starting to come down. so the one percent admin cost is there but the system is very little in creating efficiencies. caller: good morning. i remember when newt gingrich was on the floor and said i can't wait million medicare dies on the vine. it's amazing that he could make a statement like that. i'm a very old man and i remember when all those people

lived in hooverville. it was a long time ago. but i remember those things and i -- it's really refreshing to hear someone stand up and say medicare is a wonderful program. it's universal just about. host: tom? guest: you know, he says -- although he says things that are misinterpreted -- i don't think he wanted medicare to die on the vine. i think he was talking about he wanted the price fixing mechanism which i talked about earlier. what he wanted is what's

happened gradually is that the medicare price fixing has died on the vine. seniors buy private plans which is happening now. i spent a lot of time when him then. that what he really wanted was that medicare become more competitive and more like private insurance and it came across like he wanted to get rid of medicare. i know him pretty well. i actually like him. his intention was modernize medicare and get rid of the old and bring in the new medicare. he's a very smart guy with strong opinions. i don't think he wanted to get rid of it. just the old price fixing problem. host: medicare is not free. the money still comes out from their social security and many old have a problem trying to live and buy medicine. mike, question or comment here

for tom? caller: medicare fraud, how big is it, who's responsible for it and what are they doing? host: medicare fraud, tom scully. guest: it's a big problem. you know, it's a $600 million a year program. fraud, yes, i mean, i used to jokingly say we could cut off south florida and parts of louisiana and you'd save a lot of money. there's certain pockets in the country where there is fraud going on. it's a single-payor program no matter what.

ppayo very capable and very smart. you know, they spent a lot of time on it. i believe permly -- personally that the risk of fraud is on the treasury and all of you. when you hand that risk over to a blue cross plan, the risk of fraud is on them and when their money is at risk, they tend to be a lot tougher. my own view is that this move to more private health plans also helps on the fraud side because these companies will be tough

when their cash is at risk. caller: i was thinking that this is more like many great society programs which begin with good intentions but has evolved into helping the wealthy similar to the pbs which has become a de facto arm of blumberg media. what you said about the working poor subsidizing the golfers in florida rings very true to me and seeing this program as well as many other great society programs evolving into not what they were intended for in the beginning host: back to the top ten reasons why americans love

medicare. they write medicare's price is lower than private beneficiaries. guest: well, i think that's totally wrong. the issue is -- there's a lot of things. because medicare and medicaid are big government payers over the years, on average, the medicaid -- about 95 percent of their costs. the medicaid in the state is about 65 percent of the cost. say you're running a big hospital system, you're a hospital and you're getting 95 of your cost from medicare and 65 from medicaid, what do you do? you cost shift to the private

sector. is that an efficient way to do it? i would argue not. there are a lot of things that i like structurally, get in trouble with republicans for saying this, but the structure of the aca. the problem with it is the real issue about these programs is that they are massive, they're the united states government. the issue is who should get the sub sub subcy subsidies. i'm a huge fan of taking care of poor people. there are a lot of good things happening in the healthcare system to make it more efficient in my opinion right now. the issue is money and who should be subsidizing.

it's a real problem to create these massive social problems that subsidize people that are significantly not in the low income category and once they get going, they're never coming back. so that's the debate, who should be subsidized and that should be a large national debate. there's fewer problems in the structure of the aca and bigger progresses in the fiscal structure and where the money's going. and i think that's the discussion. host: new york, bo is next. caller: thank you for taking my call. i have quite a bit of a hard time understanding a few things. i'm just about in my mid-40s there and i noticed that a lot of these immigrants and refugees that have come over have had aquite an easy way of living in

society. and when i asked around, some mutilation of how they have been helped by the federal government or the federal government gives funds to the state to give them some kind of edge in jobs, edges in certain programs. host: are you asking about illegal immigrants having access to medicaid, these programs? caller: yes. guest: if you're a hospital, my partnersh partnership, 21 percent of the people who walk into the hospitals are uninsuranced. when you look at that, they're going to go in the hospital when they have kids, when they're sick, and how they're going to pay for it. so in some states, they support payments for some folks and that's a big debate.

but once they're here, you're going to provide healthcare no matter what. eventually we're all paying for it. so the average hospital in our country probably has 12 percent of its patients walking in uninsured and if the government doesn't pay for it, we're all going to pay for it somehow. i don't think we should get into the immigration debate but once people are here, they're going to get healthcare. host: we have about five minutes left here talking about medicare and medicaid as part of lyndon johnson's view of a great society signed in 1965. thomas in pennsylvania. you're next, thomas. go ahead. caller: hi. that's me. i just like to throw this out to

the discussion with the gentleman. he seems to know what he's talking about. my wife and i are both on social security. at the end of the year, we get a w-2 form and the first thing we notice is there's income tax taken out because we're told that's the portion that your employers paid in for you. so, okay, then i'll look further down the line. it says medicare, 1 thousand 2 hundred dollars, both checked. we have that taken out. so we're paying for the coverage of medicare. all during our working years, we paid into the fund called medicare. now, medicaid, i'm not against it in the way that people need help, fine. but why did the gentleman before me say someone in the house said something about us living too

long? i'm 84. she's 82. that has nothing to do with living too long since medicare we're paying. host: okay. we'll take that point because that's a tweet from one of our viewers, jean, as well. guest: it's still a big subsidy for the taxpayers. you pay 1.4 percent for your entire working life. since the aca passed if you're relatively wealthy, you pay another.9 percent on top of that so it goes up one point. that pays for part a of medicare which is the hospital side. and that roughly finances the entire thing so you can say on the hospital side, you basically paid in all our life. on the part b side which is a

little smaller that pays for your doctor visits things like that. that is funded 25 percent of the cost. that's your $1,200 a year. the premium is $104 or something a month and it's taken out of your social security check. the other 75 percent is paid by taxpayers. so you're getting a 75 percent subsidy subsidy on part b. so the total average medicare beneficiary, it costs about 14 thousand dollars to provide medicare benefits and on average you're paying for all of part a and 25 percent of part b. so you are paying for it but it's still a significant subsidy in there from taxpayers.

that's the way it's set up and it's intended to. my mom is 85. she's probably watching this. hopefully she has another 20 years left. host: people forget what hideous poverty people lived in prior to social security and medicare. caller: thank you for taking my call. i agree, mr. scully, as far as the medicare and medicaid. it should be more selective. to me, it's just another issue with the government, commonsense needs to take over for politicians in general. people without a need don't need to be on the program but we're given no choice with the medicare program. i agree that we need to just be more selective in the people who partake in these programs. thank you very much. host: all right.

tom, let me ask you -- guest: i think the social security fabric, a lot of people say keep the government out of my medicare but the fact is when you're over 65, healthcare costs go up, commercial insurance is not viable. we already have some wealthy seniors pay more already. my own view is they should pay even more. host: and now this question of what people should pay and how they're going to afford. a third of people have nothing saved for retirement. 16 percent -- 14 percent of adults older than 65 have very little saved for retirement and then you have this headline also from u.s.a. today that the cost of raising children will cost you $245,000 a year. some of that cost is healthcare.

so without programs like medicare and medicaid, how are people in the future going to afford healthcare when the cost keeps going on. guest: i think a lot of the changes happening lately and the move towards more private healthcare is result of more competition and private