AN OLD FRIEND, encountering Representative Wilbur D. Mills in a Washington restaurant recently, reached out and squeezed the Arkansas congressman's arm. "Does it feel sore?" he asked. Mills showed a trace of a smile. "I haven't felt anything yet," he replied.

Behind the jest was a serious issue: whether Lyndon B. Johnson, for all his Congressional arm-twisting, can persuade Mills to accept the principle of medical care for the aged financed through Social Security or a similar payroll-tax plan. This would represent a breakthrough for Medicare supporters, and might just be enough to send the program through Congress this year. There are many reasons why Medicare has never been approved, but the main obstacle has been Mills. As chairman of the House Ways and Means Committee, where all Social Security and tax bills must originate, Mills has blocked a bill from the House floor for seven years.

Although Mills has repeatedly turned aside administration pleas, there have been recent reports, perhaps based more on hope than on substance, that his opposition to the Social Security approach of the King-Anderson Medicare bill is softening. Some of his colleagues hope Mills is now willing to consider a compromise package that would include a modified version of the hospitalization insurance proposed in the Medicare bill. During the Senate-House conferences on the tax-reduction bill in late February, Mills stepped out of those important and complicated sessions to confer with Assistant Secretary of Health, Education and Welfare Wilbur Cohen about a possible compromise between Medicare and the Kerr-Mills plan, which now offers Federal funds to state medical programs for the needy aged. A switch by Chairman Mills could sway enough votes to assure committee endorsement of a bill. "I wouldn't care if we had nearly every vote already," says one administration official. "The only vote that really counts on that committee is the one belonging to Wilbur Mills."

The Johnson administration would like to have a bill this election year so that Democratic candidates could point to the delivery of a principal campaign promise of 1960 and 1962. Should the bill stay sidetracked, Medicare will be a questionable campaign issue and perhaps even be useless. "We can hardly make a lot of new promises when we've failed to come through during these four years," a White House aide confided.

Some administration officials think that President Johnson himself needs a Medicare bill to dispel the nagging doubts of Northern Democrats and union members about Johnson's liberal credentials. If Congress passed Medicare, Johnson could head into the campaign having launched one important new program (the war on poverty), fought vigorously for one that President Kennedy began (civil rights), and accomplished another (Medicare) that Kennedy couldn't even move.

Gaps in the Stopgaps

Would Mills be inclined to do all he could to assure the election of fellow Southerner Johnson? Those who answer "Yes" say their conclusions are the more valid in the light of recent changes in the Arkansas political map. When the legislature redistricted the state two years ago, it extended Mills's conservative-rural district to include the city of Little Rock. This enabled labor forces in Little Rock to petition Mills for greater consideration to Medicare and less to the opposing pleas of doctors in the rural sections of the district.

Some observers also believe Mills is more amenable to compromise this year because of the failure of other efforts, including his own, to provide satisfactory health care for the elderly. Some of his associates suspect that Mills is no longer so sold on the Kerr-Mills Act, which he and the late Senator Robert Kerr (D., Oklahoma) engineered as a stop-Medicare move in 1960. The Kerr-Mills program had two strikes against it from the start: the slowness of states to join up and the widespread disparity in eligibility standards among the states that are participating. Only thirty-two states provide Kerr-Mills assistance, and some of them offer little more than token sums. Moreover, five of the wealthy states—California, New York, Pennsylvania, Massachusetts, and Michigan—receive eighty-three per cent of the Federal allotments simply because they are willing to put up a greater share of state monies. New York, with ten per cent of the nation's aged, receives thirty-five per cent of the Federal funds.

When the Department of Health, Education and Welfare reported in 1962 that comparatively few of the nation's older citizens were benefiting from the Kerr-Mills program, its supporters demanded more time to make it work. Now some of them concede that the program may never work unless there are more Federal controls and more Federal funds. Only Hawaii, Massachusetts, New York, and North Dakota have plans that meet HEW'S definition of a comprehensive health program. Administrative costs have swollen because of the cumbersome procedures required for certifying that persons are poor enough to get the aid. In Tennessee, for example, administrative costs rose to fifty-nine cents of every dollar spent for medical assistance. The stiff eligibility rules — in most states a person's resources must be depleted to the poverty point — have limited participation and kept out many persons with incomes above $1,200 a year. The biggest criticism of Kerr-Mills, however, is that it approaches the health-care problem from the wrong direction. What is needed, the critics insist, is not a program that helps people after they become destitute, but one that prevents them from becoming destitute.

Despite spirited tries in recent years, commercial insurance has failed to fill the health-care gap, although it is true that more old people carry some kind of health insurance than ever before. Some estimates put the coverage at sixty per cent of those over sixty-five. Yet the number of persons without protection is nearly as large as it was five years ago. Many policies provide only limited benefits — typically a hospital room-and-board allowance of $10 a day, or about half the average charge. Policyholders frequently find that they must pay fifty to eighty per cent of their hospital bills themselves.

Because of substantial losses, a number of underwriters have been forced recently to seek either increased rates for special elderly insurance plans or a reduction in benefits. The Chicago Blue Cross recently cut its benefits more than twenty-five per cent to nongroup subscribers, most of them over sixty-five, and the Continental Casualty Company, which unveiled a "Golden 65" plan with some fanfare two years ago, had to increase its rates sharply in all of the states this year. This experience may explain why many companies are wary of entering the field. No company is going to pay out more in benefits than it collects in premiums. "The best that private insurance has been able to do to solve the dilemma of high costs and low income," Secretary Anthony Celebrezze has said, "is to offer either low-cost policies with inadequate protection or more adequate policies that are priced out of the reach of most of the aged."

What Will Wilbur Do?

But the mounting logic for Medicare cannot in itself be a basis for counting on support from Mills, who is one of the most unpredictable men in Congress. "He'll tell you one thing in the morning and do the opposite in the afternoon," one veteran member of the Ways and Means Committee remarked recently.

Some Medicare supporters believe Mills can be swayed less by logic than by the knowledge that his committee's minority for Medicare may grow. White House strategists now believe that they can count on twelve votes, one less than a majority, for some kind of Medicare. Mills has earned his reputation in Congress by always sensing the mood of his committee and finding the precise point on which most of the divergent Democratic views can coalesce, or at least balance. If Mills, influential and persuasive as he is, feels that a near majority of the committee wants some form of hospital insurance as the only way to meet the health problems of the aged, he may agree to support some limited form of Medicare. This, in fact, is a major hope of the Johnson administration.

But it is just as conceivable that Mills will rebel at the latest overtures to enlist his co-operation. A reporter who visited Mills recently found him miffed at the rumors of his pending capitulation. He insisted that the reports were inspired by overzealous HEW officials anxious to put him on the spot. The assumption that Mills is ready to give Johnson a political boost could be unwarranted. At least one theory maintains that Mills, a Harvard man, enjoyed greater rapport with Kennedy, for whom he performed nobly on trade and tax matters. Certainly the two had a mutual admiration—so much so that before Kennedy's death there were rumors that Mills might be offered the next Supreme Court vacancy — a move that would have had the collateral advantage of removing Mills as an obstacle to Medicare.

Mills has long maintained in public that Medicare would abuse the principles of the Social Security System. Under the old-age and disability benefits programs, fixed sums of money are paid out. The theory is a simple one: the money replaces part of the earnings lost by a worker when he retires or becomes disabled. But Medicare would introduce a new principle of giving services, no matter what their cost. It is this concept that bothers Mills, who has a deep commitment to Social Security. He is suspicious of Medicare because this change would be a radical one and would lead to greater Social Security taxes. During hearings last November, Mills concentrated on the cost estimates of administration witnesses, making it plain that he believed the King-Anderson provision of a one-half of one per cent tax increase would be insufficient to finance the program. He said the administration had failed to anticipate steadily rising hospital costs. To be actuarially sound, he indicated that a full one per cent increase would be needed.

THE DRIVE for Medicare could be caught in a crossfire of concern about costs and of demands for more retirement benefits. Many congressmen are challenging the adequacy of the current maximum $127 monthly Social Security payments in the light of the 6.9 per cent cost-of-living increase since they were set in 1958. In this election year, pressure to enlarge an existing Social Security program could offset demands for a new kind of program. Or the Medicare bill might be scaled down so far as to produce disappointment and resentment. "If we have to dehydrate the bill to get Mills's neutrality, we might be better off with nothing," a White House assistant argued.

Most advocates of Medicare have already abandoned hope of obtaining the hospitalization, nursing, and home-care benefits originally sought. The Social Security principle has now become all-important, and some supporters would be content to accept a lame version in hopes of vitalizing the program in future years. Some think that the administration might have built an acceptable compromise around a proposal made in 1962 by Representative Burr P. Harrison (D., Virginia). Then a conservative member of Ways and Means, Harrison agreed to support a Social Security plan that provided benefits only for long-term illnesses. With administration endorsement, the Harrison compromise might have cleared Ways and Means and perhaps even Congress. But it was rejected by HEW Secretary Abraham Ribicoff, who threw the administration's support behind a revised version of King-Anderson that was advocated by Senator Jacob Javits (R., New York).

The Medicare campaign has been hampered by its diffuse leadership and by a lack of unity in the ranks. Unions and senior citizens' clubs have been the prime outside pushers, but their efforts have not always been well co-ordinated. Representative Aime J. Forand (D., Rhode Island), the original chief sponsor in Ways and Means, and now Representative Cecil R. King (D., California) have not distinguished themselves as the bills's captains. "They need a bulldog like Gene Keogh who keeps punching away all the time," an opponent said, alluding to Representative Eugene Keogh (D., New York), whose efforts for many years in the committee once led to Congressional approval of a bill to liberalize certain taxes for self-employed persons.

Intramural bickering between HEW Under Secretary Ivan Nestingen and Assistant Secretary Cohen has not helped. Cohen, one of the nation's foremost authorities on Social Security, was in command of Medicare strategy until 1962, when the Senate rejected 52-48 a compromise Medicare measure sponsored by Senator Clinton Anderson (D., New Mexico). Rightly or wrongly, the White House blamed Cohen for misjudging the Senate temper, and gave Nestingen greater responsibility to direct strategy. Cohen, however, has continued to work closely with Mills and other members of Ways and Means on Social Security legislation, and it is uncertain who has the final word. One thing is apparent: the two officials don't always see eye to eye, and, according to HEW insiders, there have been some spirited clashes.

By far the most serious obstacle has been the well-organized, well-financed opposition campaign of the American Medical Association. While it has relied primarily on scare tactics, the doctors' lobby has shown considerable ingenuity in fighting Medicare. Dossiers about members of Congress are kept on file, and attempts are made to sway the legislators through their personal physicians. Questionnaires sent out to doctors across the country have sought the names of principal contributors to political campaigns. One of the main witnesses at hearings held by Ways and Means in 1959 was Dr. R. B. Robins of Camden, Arkansas, an AMA trustee—and a personal friend of Mills.

The AMA's New Line

But the AMA has undergone one noticeable shift in emphasis. Until the past year or so, its principal pitch was the familiar refrain about socialized medicine and government controls. Now, AMA stresses Medicare's potential costs and rise in payroll taxes that would occur. "Why should everyone over sixty-five get hospitalization at the expense of wage earners just because a few need help?" asked Dr. Edward R. Annis, the president of AMA, last month. "Why should the workers of America be forced to pay higher taxes for hospitalization for everyone over sixty-five, many of whom are wealthy and millions of whom have health insurance—just because they've had a birthday?"

One of the AMA'S techniques led to an embarrassing $400,000 damage suit late last year. Paul Normile, a member of the executive board of the United Steelworkers, filed the suit charging that the AMA'S political arm, the American Medical Political Action Committee, was distributing a phonograph record that supposedly was a transcription of a speech by Normile. Normile said the voice was not his. At one point on the record a tough-talking unionist demands that each member contribute a dollar for COPE, the AFL-CIO'S Committee on Political Education. "For those that don't want to give," the unionist says, "you shop stewards can always let them know there is still a graveyard shift. They'll kick in."

The unionist says the money is needed "to help Joe [Senator Joseph S. Clark, D., Pennsylvania] push his Medicare bill in the Senate." When Normile filed his suit and charged that the record was a phony, the AMA agreed to discontinue distribution of the record pending the outcome of the suit. In a deposition filed with the U.S. District Court in Washington, Walter Hughes, executive director of the Pennsylvania branch of the AMPAC, explained that a man named "Irv" had put him in touch with a man called "Cousin," who had sold him a tape recording of a meeting that "Cousin" said "would be very interesting to medicine." Hughes said he paid $20 for it.

Whatever the impact of these latest machinations, the medical lobby has already succeeded in confusing the issues and raising doubts. Support seems to have diminished as voters discover that adoption of a government-insurance program will mean smaller pay checks. Senator William Proxmire (D., Wisconsin), a Medicare supporter, found that approval of the bill in a survey of Wisconsin voters dropped from sixty per cent in 1961 to forty-nine per cent last year. And Representative Page Belcher (R., Oklahoma) was amazed to find that foreign aid was less unpopular than Medicare with his rural constituents. Supporters generally concede that Medicare has lost some of its political punch, and a few insist that Johnson doesn't even need it in November. "There is no great national groundswell for this legislation," one prominent House Democrat has argued. "The war on poverty will give Johnson his campaign issue."

Sooner or Later

But if Wilbur Mills succumbs — and that of course is a big "if" — the anti-Medicare forces almost surely will disperse. With Mills in charge, the bill, despite intense pressure from the doctors, would probably win approval in the House. Even less difficulty would be expected from the Senate. Some Republican senators who voted against Medicare in 1962 have been replaced by pro-Medicare Democrats now, and some Southern Democrats privately admit that they voted against the bill in 1962 because it had no chance: there was no political advantage, they explain, in a vote that would only produce enmity from doctors and no benefits to constituents. If Medicare had a chance, they would support it, confident that the medical benefits would redound to their advantage in the long run.

The President has made it clear to intimates that he wants a Medicare bill. The White House is also prepared to offer a compromise that Mills might find appealing. To alleviate his concern about future costs, administration officials probably will agree to raise the taxable wage base from $4,800 to $5,400 or even $5,600, instead of the $5,200 proposed by the bill. They also have let it be known they will be happy to accept Mills's ideas for improving Kerr-Mills. Johnson took pains in his Health Message of February 10 to portray Kerr-Mills as a valuable supplement, not a substitute, for Medicare.

Thus, the Kerr-Mills Act, embraced so fervently by AMA leaders, could turn out to guarantee their ultimate defeat in the Medicare battle. The reason rests in plain arithmetic. As Kerr-Mills expands and improves, its financing charges will soar; from total Federal and state outlays of $196 million the first full year of operations (fiscal 1962), the costs are expected to reach $451 million in fiscal 1965. Even if there is no legislation this year, the growing drain on Federal and state treasuries is bound to generate powerful pressures for a sensible financing arrangement-—like a payroll tax plan. "One of the strangest things about this whole issue has been the cross-up in ideologies," one Capitol Hill veteran has observed. "The conservatives have been the liberals, and the liberals have been the conservatives."

BUT EVEN without this unexpected assist from Kerr-Mills, Medicare's boosters have one other reason for believing they will achieve their objective — if not this year, sometime soon after. The senior-citizen lobbies are growing more powerful simply because the ranks of those over sixty-five are increasing so rapidly, from 15.5 million five years ago to 18 million now. And the power of this bloc of voters is hardly lost on the average congressman.