ABSTRACT
The implementation of Kerr-Mills in the states was similar in flavor to the later implementation of Medicaid. Kerr-Mills was built on the dilemma that foreshadowed Medicaid. The 1965 law, as interpreted by the regulations, required the states to provide five basic services for those covered by Medicaid: physician's services, skilled nursing home services, inpatient hospital services, outpatient hospital services, and other laboratory or X-ray services. Increasingly Medicaid was to be regarded not as one component of state welfare programs but as a substantial national commitment of funds for medical care. While the states—and potential beneficiaries—struggled with the administrative complexities of Kerr-Mills, pressures built up in Congress for hospital insurance for the aged through Social Security for persons at all income levels. As cost controls were beginning to be developed through federal intervention in Medicaid, there was a movement—again from within the Senate Finance Committee—to slow the expansion of services that had been envisaged in the initial development of Medicaid.
