National Health Insurance
NATIONAL HEALTH INSURANCE
Proposals for a national health insurance system were heard as early as 1912, when President Theodore Roosevelt's Progressive Party platform (following the example of Germany and other European nations) called for "the protection of home life against the hazards of sickness, irregular employment and old age through the adoption of a system of social insurance adapted to American use." Shortly thereafter, the American Association for Labor Legislation (AALL) formed a Committee on Social Insurance comprising prominent members of the American Medical Association (AMA) and others. The committee recommended a compulsory plan covering the majority of workers.
Efforts to enact the AALL plan at the state level failed, largely due to opposition from organized medicine and other conservative elements that considered it a harbinger of radical social change. The AMA initially called the plan the "inauguration of a great social movement" (1917), but rapidly changed course and consistently opposed mandatory health insurance since that time. In 1920 the AMA House of Delegates resolved to oppose "any plan embodying the system of compulsory insurance which provides for medical service to be rendered contributors or their dependents provided, controlled or regulated by any state or the federal government." The labor leader Samuel Gompers joined in opposition, apparently fearing that benefits gained through legislation rather than negotiation would be vulnerable to later repeal or limitation.
In 1927 President Calvin Coolidge appointed a Committee on the Cost of Medical Care, funded by a consortia of foundations, led by Carnegie and
Franklin D. Roosevelt campaigned for the presidency in 1934 on a platform that promised aggressive government action to relieve the massive social and economic dislocations created by the Great Depression. Health insurance was included in a long list of problems facing the nation. Shortly after election, he named a cabinet-level Committee on Economic Security to look into "all forms of social insurance." Health insurance was included in a long list of problems facing the nation. However, the AMA's unrelenting opposition to any public health insurance again frustrated action. The President's advisors reasoned that organized medicine could hold the entire Social Security bill hostage. They recommended that, instead of including a health component, the President offer a study of health insurance options. The Social Security Act passed in 1935 with no mention of health care, but authorizing the study of actions the government might take to assure the economic security of older citizens. Subsequent Social Security Board reports called for health insurance, hospital construction grants, grants to states for indigent care, and health insurance programs. These recommendations formed the basis of the Murray-Wagner-Dingell bill.
President Harry S. Truman endorsed the Murray-Wagner-Dingell bill in 1945 and asked Congress to enact compulsory health insurance funded by payroll deductions. AMA opposition killed the bill. After Truman's upset victory in 1948, the AMA voted a special assessment of members to "resist the enslavement of the medical profession." Truman failed to win legislation, but did develop a plan to provide sixty days of free hospital care for aged Social Security beneficiaries. This idea later became the core of insurance benefits under Medicare.
The 1960 Democratic Party Platform endorsed medical care benefits for the aged under Social Security. Shortly after taking office, President John F. Kennedy made health insurance his priority domestic issue in the New Frontier. AMA reaction was rapid and predictable. Insurance companies joined in opposition. However, public response to Kennedy's 1962 rally in Madison Square Garden made it clear that health insurance had popular support. Kennedy was assassinated before Congress seriously considered his proposal. The political climate created by the Kennedy assassination was masterfully exploited by President Lyndon B. Johnson. Johnson's overwhelming defeat of Barry Goldwater in 1964 and the simultaneous election a large Democratic majority in Congress set the stage for enactment of the Great Society programs, starting with Medicare. Johnson made health insurance his top legislative priority. On July 28, 1965, Medicare and Medicaid became law, providing Social Security–based coverage for hospital and physician services to the aged, and a program of matching federal grants to states for coverage of physician, hospital and nursing home services for the poor. In a symbolic gesture, Johnson signed the bill in Independence, Missouri, joined by former President Truman.
Medicare and Medicaid rapidly changed the structure of health care in the United States. Millions of aged and poor, received services for which physicians and hospitals were fully reimbursed. This new revenue stream supported modernization of the nation's hospitals and creation of technology intensive academic medical centers. Federal involvement in the medical system also desegregated hospitals and other institutional providers. Rapid growth in national health expenditures followed—more than doubling within five years, a pattern that continued for the next twenty-five years. The pressures of this growth on public programs and privately held insurance created an unlikely alliance of interests for enactment of health insurance to expand coverage and contain costs.
In 1969 Walter Reuther, president of the United Auto Workers, formed a Committee of 100 for National Health Insurance, an alliance of labor unions and liberals activists. Reuther launched a national effort to develop and enact comprehensive health insurance. Senator Edward M. Kennedy became the leading Congressional supporter of the resulting Health Security Plan, launching his continuing role as the most consistent Congressional advocate for comprehensive national health
President Jimmy Carter's election in 1976 reopened the debate. The Carter administration developed a plan—Health Security—that combined requirements for employers to offer health insurance to their employees with an expansion of the Medicare and Medicaid programs. Health costs were to be contained through high patient out-of-pocket spending requirements. Senator Kennedy and Representative Henry Waxman advanced their own bill—Health Care for All Americans Act—that combined a national health budget with insurance plans offered to all employers and individuals through a consortia of companies. With the Democrats in disarray, and historic opposition by organized medicine, business, the insurance industry, and conservative Republicans, any possibility of legislative action was doomed. In the aftermath of this failure, there were modest expansions of Medicaid coverage for pregnant women and children, and the introduction of new Medicare reimbursement methods for hospitals, a largely futile effort to contain hospital costs.
In the Ronald Reagan and George Bush administrations (1981–1993) the focus of health policy was largely on cost containment rather than expanding coverage. However, additional modest expansions of Medicaid emerged from the Democratic Congress. During this period the number of uninsured Americans continued to grow. Importantly, during the 1990–1991 recession, large numbers of middle class Americans lost jobs and insurance coverage, fueling new political support for health care reform.
President Bill Clinton made health reform the centerpiece of his presidential campaign, and after his 1992 election designated his wife, Hillary Rodham Clinton, to lead Administration efforts to design and enact a national health insurance bill. On September 22, 1993, Clinton addressed a joint session of Congress to describe the plan, historically named "Health Security." The Clinton plan combined familiar elements of previous health insurance proposals with complex and novel ideas for cost containment and management of insurance competition. The core concept would have mandated employer purchased coverage through "accountable" provider plans contracting with state-regulated consumer alliances. Public funds would subsidize low-wage employers, the self-employed and near-poor. The alliances would manage competition to assure access and risk pooling. Congress was initially friendly to the plan, but its complexity, inept management of the political process by the administration, and well financed, vociferous opposition by insurance companies health plans and organized medicine combined to defeat the Clinton effort. The after-effects of the health care reform debacle helped elect the conservative 1994 Republican Congress. These developments created a political climate in which Teddy Roosevelt's goal of a national system to assure access to a health insurance for all Americans could not be achieved, and unleashed a market-driven reform of health care delivery, dramatically changing the practice of medicine. At the end of 1999, an estimated 44 million Americans remained uninsured.
SUSANNE A. STOIBER