President Franklin D. Roosevelt initially included national health insurance–an early version of “Medicare for All” –as part of the Social Security Act in the 1940s. There was strong opposition from organized medicine, who then stirred public fears about the dangers of socialism. This rabble intensified despite Roosevelt’s proposal not including socialized medicine at all, but national health insurance. Concerned the entire Social Security bill would collapse, President Roosevelt pulled national health insurance from consideration. As a result, health insurance access remained firmly linked to employment status.
Major unintended consequences arise when health insurance is linked to employment. People may remain health insurance hostages to a job, or even a marriage for spousal health insurance benefits. But a larger consequence is not always as obvious to those marinated in the U.S. system. Linking health insurance to employment excludes those who, well…are not employed! They may be retired, disabled or simply unable to find work. Or, they may work for an employer who does not offer health insurance.
The negative unintended consequences of employer-based health insurance accelerated between the 1940s and 1960s. By the mid 1960s medical bankruptcy was common among the elderly. Nearly three-fourths of U.S. elders living below the poverty line and represented the segment of society most likely to be living in poverty. Today it is children.
The 1960s was the era of President Lyndon Johnson’s Great Society, which aimed to irradiate poverty. Compelling public testimony spurred the inclusion of heath care in these efforts. Testimony like this:
I am one of your old retired teachers that has been forgotten. I am 80 years old and for 10 years I have been living on a bare nothing, two means a day, one egg, a soup, because I want to be independent…And I worked so hard that I have pernicious anemia, $9.95 for a little bottle of liquid or shots, wholesale, I couldn’t pay for it.
Medicare–largely for the elderly–and Medicaid–largely for the poor and disabled were enacted as amendments to the Social Security Act. Two medical conditions for those under 65, end-stage kidney disease and amyotrophic lateral sclerosis, more commonly known as Lou Gehrig’s disease, were added in 1972 and 2001, respectively.
Former President Truman received the first Medicare Cards on July 30, 1965. They were presented to him by then President Lyndon Johnson who stated: We marvel not simply at the passage of this bill, but what we marvel at is that it took so many years to pass.
This too, had unintended consequences. The inclusion of financial coverage for care of the elderly and disabled created a new revenue stream, which was also reliable: the newly included individuals were cohorts more likely to need services relative to those covered by commercial insurance. In response to this new revenue stream, the health care industry grew dramatically, without corresponding checks on cost and attention to quality and outcomes.
Americans often consider the U.S. health care to be private, but it is a hybrid of public and private. Considering all sources of funding, the U.S. governmental portion of overall health care spending is roughly 63%. Canada, a nation with national health insurance to guarantee health insurance to all, is roughly 70% tax funded. Some conclude that this U.S. figure represents too much government involvement and Medicare, Medicaid, and other tax-supported health initiatives must be scaled back. Conversely, others conclude that the U.S. is more than two-thirds of the way to a publically funded system and could go the rest of the way. What do you think?
References
I am one of your old retired teachers that has been forgotten… Stevens, cited in DeLew, N. (2000). Medicare: 35 years of service. Health Care Financing Review, 22(1), 75-102.
…. overall health care spending is now roughly 63%, with Canada, a nation with national health insurance to guarantee health insurance to all, 70% tax funded. Himmelstein, D., & Woolhandler, S. (2016). The current and projected taxpayer shares of US health costs. American Journal of Public Health,106:449–452. doi:10.2105/AJPH.2015.302997.