HEALTHCARE REFORM
THE FIRST 100 YEARS
First Attempt: 1912-1917
In 1912, President Theodore Roosevelt campaigned on the Progressive
Party ticket for national health insurance (NHI), together with women’s
suffrage, safe conditions for industrial workers and other social
issues. This would have been consistent with a trend over the previous
30 years in many European countries to establish one form or another of
social health insurance. Although Roosevelt lost the election to
Woodrow Wilson, progressives continued to push for NHI over the next few
years. Several states, including Massachusetts, New York and
California, introduced health insurance bills during those years, and
Congress held hearings in 1916 on a federal plan to provide disability
and sickness benefits.
Some reform groups, including a strong American Association of Labor
Legislation, advocated energetically for NHI. But as the public debate
proceeded, some of the initial proponents for NHI developed conflicting
positions. Organized labor, for example, later sided more with
business. Then with a sudden shift of the country’s priorities with our
entry into World War I, the proposal was defeated in 1917 by a powerful
alliance between business and organized medicine.
Second Attempt: 1932-1938
The 1920’s saw a growing concern across the country about the rising
costs of health care. As a result, an independent commission was
established with private funding, the Committee on the Costs of Medical
Care (CCMC), including economists, physicians and public health
professionals. For a growing number of families during those Great
Depression years, average family costs of care ($250/year) consumed
one-third or more of their annual income. Chaired by Dr. Ray Lyman
Wilbur, the Commission issued an influential interim report in 1932, The
Economics of Public Health and Medical Care, calling for “a new
approach to health insurance because the costs of medical care now
involve larger sums of money and affect more people than does wage-loss
due to sickness.”
As the CCMC led the charge for NHI, the American Medical Association
(AMA) quickly denounced it as socialism. President Franklin D.
Roosevelt had already taken on the special interests in enacting the
Glass-Steagall Act, divesting Wall Street investment houses of banking
functions, and by establishing the Tennessee Valley Authority to provide
cheap electric power in the South. He was reluctant, however, to take
on the AMA over NHI. The AMA was a much more consolidated and powerful
group than it is today, so the New Deal went ahead with Social Security
without NHI. Of special interest today, however, is that FDR was fully
prepared to fight for legislation without a bipartisan approach. In her
classic biography, FDR, Jean Edward Smith, Professor of Political
Science at Marshall University, describes how FDR relished the hatred of
the special interests, whom he called “economic royalists,” and waged
class warfare without apology as long as he knew he had a majority of
the public on his side.
Third Attempt: 1945-1950
While postponing action on NHI during the 1930’s, FDR did not abandon
the idea. He put it back on the legislative agenda in his 1944 State of
the Union message, asking Congress for an “economic bill of rights” to
include a plan for adequate medical care. After FDR died in April 1945,
President Harry Truman proposed a compulsory plan for comprehensive
NHI, together with increased hospital construction and doubling the
numbers of physicians and nurses nationwide. NHI was to be administered
through the Social Security program, and its provisions were
incorporated into the Wagner-Murray-Dingell bill in Congress.
Battle lines over the latest proposal for NHI were quickly drawn,
pitting the AMA and the American Hospital Association (AHA) against
progressives and the Committee on the Nation’s Health, an ad hoc group
of liberals and union leaders. While President Truman attempted to
reassure opponents that the program would not be socialized medicine and
that “people would get medical and hospital services just as they do
now,” opponents demonized the bill as socialism. The AMA went so far as
to claim the NHI would “turn physicians into slaves,” proposing instead
an expansion of voluntary health insurance and indigent care services.
The AMA and AHA led a well-funded campaign against the bill, joining
with large corporations, the American Bar Association, the Chamber of
Commerce, and community organizations in the effort. Most of the
country’s press was sympathetic to the opposition. As the acrimonious
debate wore on, public attitudes toward NHI, while favorable among 58%
of the public in 1945, eroded in later surveys as a majority of people
turned to favor voluntary health insurance. The third attempt to enact
NHI lost public and legislative support as the nation entered the Korean
War.
Fourth Attempt: 1971-1974
Health insurance returned to the national stage in 1971 when President
Richard Nixon proposed an employer mandate, a “play or pay” plan
requiring employers to either provide a minimal level of health
insurance coverage to their employees or pay a tax that would finance
their coverage from an insurance pool that would also cover the
unemployed. That plan would have also placed a ceiling on out-of-pocket
health care expenses and eliminated exclusions based on pre-existing
conditions. In addition, it called for the widespread adoption of
health maintenance organizations (HMOs) with the goal to cover 90% of
the population by 1980. An accompanying “Family Health Insurance
Program” would have subsidized basic coverage for low-income families,
thereby replacing Medicaid. Senator Edward M. Kennedy counter-proposed
the “Health Security Act,” a single-payer public financing system for
universal coverage of all Americans. True to form, the AMA put forward
its own Medicredit proposal, which would have provided tax credits to
help people buy their own private insurance.
These proposals generated furious debate. Liberals considered the
Nixon proposal a windfall for the private insurance industry that fell
short of universal coverage by 20-40 million people, while conservatives
held out for a much more limited role of government. A compromise
proposal was forged between Kennedy and Representative Wilbur Mills
(D-AR), the powerful Chairman of the House Ways and Means Committee,
which would have required co-payments of 25% and put an annual cap of
$1,000 on health care payments by individuals or families.
While the Kerr-Mills bill came quite close to passage, other events
soon claimed the country’s attention, especially the Vietnam War,
Watergate, and Mills’ personal scandal. Instead, the Health Maintenance
Organization Act was finally passed in December 1973, setting aside
$375 million for a five-year demonstration project to test the
feasibility of HMOs. This was followed the next year by the Employee
Retirement Income Security Act (ERISA), which exempted large
corporations’ self-insured health plans from state regulations.
Fifth Attempt: 1993-1994
Although Jimmy Carter campaigned for NHI during the 1976 presidential
elections, health care soon lost its priority on the national agenda as
the country was forced to deal with a recession and inflation.
President Carter’s loss to Ronald Reagan in 1980 ushered in a new time
of conservative dominance, accompanied by a resurgence of
corporatization of market-based health care with little regulation.
Reagan’s philosophy had been clearly enunciated 20 years earlier:
“Medicare is not just the first step toward a government takeover of
medicine, but the imposition of socialism throughout the economy.”
Health care was not to regain a leading place on the national agenda
until the 1990’s. Health care reform re-emerged during the 1992
election cycle as a high priority issue. By the early 1990’s,
competition had become the great hope to control increasing costs,
decreased access, and variable quality in our market-based system. Many
hoped that a reorganized system could induce more competition within a
more regulated insurance industry and lead toward universal coverage.
1993 opened with a flurry of activity and renewed energy toward
developing legislative proposals for universal coverage. President Bill
Clinton appointed his wife, Hilary Rodham Clinton, as chairperson of
the Health Care Task Force, which was carefully selected from the
insurance industry and business, who were chiefly responsible for the
problems of the existing system. Proceedings of the Task Force were
held behind closed doors, and little input was sought from either the
health professions or the public policy community.
After heated controversy among the Task Force members involving
divisions within and between insurance and business interests, the
American Health Security Act emerged in Congress as the Clinton Health
Plan (CHP). It was soon joined in the legislative hopper by five other
competing proposals. Four of the proposals, two Democratic and two
Republican, were variants of managed competition, while the fifth was a
single payer plan modeled after the Canadian [Medicare] system.
As the battles ensued among the competing stakeholders and their
lobbyists, and as more specifics became known about each of the
proposals, legislative support melted away for any of the plans. In
1994, the CHP died in committee without getting to a floor vote. HR
3222 was the only proposal with bipartisan support, but not anywhere
enough for passage. The single payer proposal (HR 1200) attracted the
largest number of supporters in Congress and was the only one to pass
out of committee, but it was soon marginalized by lobbyists and
ridiculed by the major corporate media as too “extreme” or “utopian.”
The CHP was criticized from most quarters as too complex, too
expensive, and poorly conceived. It was seen as a sell-out to the
private insurance industry, and dubbed by some observers as the “Health
Insurance Industry Preservation Act.” The final bill was 1,342 pages in
length, and it became too confusing for the public and many legislators
to understand. A political debacle for the Clinton administration, its
defeat was attributed to lack of support within the working middle
class, concern about increased taxes, and growing anti-government
resentment. With the exception of two minor incremental system changes,
the failure of health care reform in 1994 put a stop to further efforts
for the next 15 years.
Sixth Attempt: 2008-2011
To be written
