Health Care Reform Wayback - A Brief History of Health Care Reform in the USA

Is Health Care Reform New?

As somebody who is very interested in the progress of health care reform as a taxpayer, private consumer of health insurance and services, and as a professional, I have been trying to follow the current health reform debates. I am getting a little frustrated with the lack of progress on either side of the aisle, and also by some of the knee jerk reactions by politicians and their groupies.. You would think that the current administration, and its political adversaries, had just invented health reform or the cries of outrage that sound against it.

I decided to do my best to outline some of the highlights of the health reform attempts, failures, and progress in the past 100 years or so. I am not a professional historian, by any means, so some may feel as if I left out important things or took them out of context. I am trying to be balanced, but take all the blame if I neglected something you feel is important.

Teddy Roosevelt In the 1910's

Teddy Roosevelt ran on a very progressive platform in the early part of the last century. His campaign promises for 1912 included protection for workers safety on the job women's right to vote, and a national health care program. He was president of the United States, by the way, from 1901 - 1909. But he lost the election of 1912 to Woodrow Wilson. It is interesting to note that this Roosevelt was a Republic. Wilson was the Democrat. Never assume that American party politics are set in stone.

Early Models of Current Health Insurance and Cries of Socialism

In 1929, Baylor Hospital in Dallas, Texas came up with a pre-paid program for a large areal teacher's union. This is considered one of the earliest models of health insurance. Now here's the irony. A few years later, an Oklahoma doctor formed a farmer's association with a pre-paid plan. Members of the association would pay into the plan, and then get services covered. The American Medical Association called this doctor's plan socialism!

Despite this, pre-paid hospital and doctor plans continued to grow in popularity around the US. However, they usually left out the unemployed and elderly.

The New Deal in the 1930's

Another Roosevelt, FDR, also wanted to implement national health reform. He wanted to include it as part of social security legislation. That did not work out, but even Truman wanted to set up a national fund. for health care. He figured everybody could pay in, like we do for social security, and then it could make sure that people's most severe health needs were met. All of this was left out of the New Deal, and the AMA continued to criticize it as socialism.

Post World War II

By the end of the second world war, it became a lot more obvious that there was a big gap between health care costs and what mos people could afford. Congress did pass a bill to build a lot more hospitals. They also required hospitals to provide charity care. They had a clause to forbid discrimination on race, religion, etc. But they did allow separate but equal care, which did not always turn out to provide equal care to everybody.

In the 1950's, labor unions began adding health benefits to their collective bargaining agreements. This really formed the basis for the group health insurance many people enjoy at work today. So group health plans became more popular, and in 1954, Congress voted to make this benefits tax-exempt.

The 1960's

JFK fought hard for national health care, but again he was met with cries of socialism. But Medicare and Medicaid, regarded as American institutions now, did emerge despite this. Medicare is the US national health plan for seniors and disabled people. Medicaid is the national health plan for very poor people.

Despite the fact that millions of Americans had heath insurance coverage for the first time, in the 1960's, health care spending and costs were beginning to rise.

The 1970's - Nixon and Carter

President Nixon, a Republican, worked for health reform. He proposed a bill that would require employers to provide minimum health insurance coverage. Under his administration, money was allocated for the development of HMOs and managed care to contain costs.

Carter ran for president, and national health care was a large part of his campaign platform. Even though he won, the severe recession put these plans on hold.

The 1980's and COBRA

COBRA is the national law that requires some employers to extend group health benefits to terminated employees for several months.

The 1990's and The Clintons

Probably the most famous previous attempt to dramatically reform health care was under President Clinton. Hillary Clinton, then first lady, spear headed this work. You will probably not be surprised to learn that political critics of the pan delighted in calling it socialism. Experts contend that the plan failed because of partisan politics on both sides. The drug and insurance companies, and the American Medical Association (AMA) also spent a lot of time and money getting the Health Security Act defeated.

CHIPS - I cannot leave the 1990's without mentioning CHIPS. This is the state and federal children's health insurance program which covers millions of children from lower and moderate income families.

21st Century Health Reform

I have to credit George Bush, a Republican, with passing the Medicare Prescription plan in 2003. This is also known as Medicare Part D, and it helps fund prescription insurance for Medicare beneficiaries.

Obama ran on a platform that included health reform. It seems like it is as tough to pass now as it was during the time of Teddy Roosevelt, FDR, Truman, and Bill Clinton. Politicians are still making deals behind closed doors, and of course, people are still shouting socialism.

But some things have changed. The AMA now supports health reform. Many businesses are concerned about spiking costs of covering employees, and representatives have admitted they would like to see some reform that would help them. Even insurance companies have said they will cooperate.

Hopefully, we can see some progress. I have no idea what will (or should) happen next.

What Next?

Read more about health care reform in the US.

Also stop by for individual health insurance quotes.

Health Reform Has a History of Failure

Health care reform is on everyone's mind.   It's an idea, they say, whose time has come. The cost of health insurance is out of control. 40 plus million Americans cannot afford or cannot qualify for health insurance.

But health care reform has been here before.  Actually, about every 15 years there is a push for reforming health care in America.   It started way back in 1912 when Theodore Roosevelt's Bull Moose Party  introduced a platform calling for national health insurance for industry.

In 1934 as part of the New Deal, Franklin Roosevelt considered proposing universal health coverage as part of the Social Security Act.  Presidents as diverse as Truman, Carter, Ford, George H.W. Bush and Clinton have all introduced various proposals for health care reform.  Universal health coverage is always the stated goal.  All the proposals put forth by all these administrations, dating back to the early 1900's  have only thing in common-failure.

In 1943 President Truman proposed a single insurance plan that would cover all Americans.  His plan allowed for public subsidies for the poor.  This universal, comprehensive plan was to be run as part of Social Security.  But  Truman was faced with an economy that was transitioning from a war time economy  to a peace time economy.   For a time Truman lost the confidence of the general public.  Republicans gained control of both houses of Congress in 1946 and branded Truman as a lame duck. 

But Truman campaigned in 1948 on a promise to extend the New Deal and specifically targeted Congressional Republicans who has opposed national health insurance.  Truman defeated these Republicans and seemed to have a mandate from the people to implement national health insurance.  But despite having a Congress that had a Democratic majority,  Truman could not pass his health reform plan. His plan failed because powerful Southern Democrats, all of whom held key leadership positions in Congress, feared that federal involvement in health care would lead to desegregation of hospitals that still separated patients by race.

Labor unions also played a part in the defeat of Truman's plan. The AFL-CIO supported the plan for universal coverage as did the UAW.  But then, the UAW negotiated a deal with General Motors that included payment by GM of health insurance and pensions.   Unions then believed that they could negotiate better benefits for their members than they could get under a federal universal health plan and they abandoned their support of universal care. 

The AMA also opposed the Truman plan but they based their opposition on the unpopular concept of socialized medicine.  As anti-communist sentiment rose,  the public support for universal health care declined.   Most large associations including the Chamber of Commerce, the ABA and the American Hospital Association supported the concept of voluntary and private health insurance.  This was also the position favored by most of the nation's media.

Universal health insurance failed again in 1950.  By that time the employer sponsored plans were deeply entrenched as an employee benefit.  This was the time that insurance companies began to experience rate premiums.  The result of this new rating system was that older, sicker people found it harder to get affordable coverage. In 1960 Congress passed the Kerr-Mills Act. This Act provided federal funds to the states to cover the health costs of the elderly who were too poor to afford health insurance.  But this Act, with all its well meaning hope, failed completely because by 1963, only 28 states had agreed to participate and even those states did not budget correctly to support the plan.  This Act became the precursor to Medicare and Medicaid.

From 1970 through 1976 more competing plans were proposed  But compromises came and went and no significant bill ever reached the House floor because of lack of Committee consensus.   President Ford withdrew his attempt at universal health reform fearing that  it would make inflation worse.  President Carter campaigned on the promise of a comprehensive national health plan but once elected shifted his priorities to cost containment, specifically hospital cost control, and told the American people that national health insurance would have to wait until the economy was stronger.

About that time, Senator Edward Kennedy introduced a new proposal which called for private health insurance companies to compete for customers. The private plans would sell an insurance card to be used for hospital and physician care.  The cost of the card would depend on income and employers would be expected to cover the majority of the cost for their employees.  The federal government would pick up the cost of the card for the poor.  Neither the Carter nor the Kennedy  proposal made it through the Congress.

The Clinton plan also supported universal health insurance through the enforcement of individual and employer mandates.  The government would control the competition between private insurance companies  The Health Care Task Force, chaired by Hillary Clinton when she was first lady,  gave President Clinton a complex plan in September 1993.  Despite a Democratic Congress,  the size and complexity of the plan slowed its progress through Congress and lost the interest of the general population.

Now in 2009, another administration is proposing health care reform. The White House has created the Office on Health Care Reform. Members of Congress are polishing up their own creations for solving this problem. The administration believes that popular opinion will compel our elected officials to end what might be considered a national embarrassment of having millions of American unable to afford or have access to quality health insurance. But as far back as the 1930's, public support quickly began to fail as the insured were advised that the goal would only be achieved if they contributed more to the cost, either directly or through some added taxes.

The United States spends twice as much per capita as the average of the 10 next richest countries in the world.  Yet, despite this expenditure, 1 out of 6 Americans under the age of 65 are uninsured and/or individually uninsurable.

One of the problems facing reform is that the 80% or so of American who have health insurance are generally happy with the care they receive. They like their doctors and the freedom to make their own choices when it comes to doctors and hospitals. Most think they already pay too much for health insurance. Most believe, and there is evidence to support this belief, that the red tape and the administrative expenses of their health insurance plan are part of the reason their cost has increased. Why can't someone fix that, they wonder?

The insured fear change.  Any proposal that threatens their current insurance arrangement will be regarded with deep suspicion. Everyone is aware of the power of special interest groups.  Our political system is set up in such a way as to frustrate action on any large and socially controversial idea.  Congressional committees wield enormous power. The interest of each state in controlling its own health insurance programs can, in itself, bring down the whole idea of reform.

We have had some success in improving access to health care for million through some of the Children's Health Insurance Programs. But note that most of the  programs to cover uninsured children are state based.

We seem to be unable to learn from past mistakes or take advantage of the concepts that actually have worked.  Anyone who has done even a cursory study of history should realize that we have been here before.

Yes health reform is back again. What will happen this time? Stay tuned.

Sheila Guilloton is the owner of Prestige Planners, a health specialty agency placing health and dental insurance for business and individuals. Licensed with all the major carriers, she counsels and advises clients on how to select the most appropriate coverage.