America’s Long Battle Over Healthcare

Article by Daniel Rowe, Edited by Liz Goodwin, Additional Research by Jack Barnes.

“At this point the United States has the unenviable distinction of being the only great nation without compulsory health insurance” Irving Fisher 1916

In stark contrast to much of the rest of the world, which generally has some form of public health provision, America relies almost exclusively on the private sector for healthcare. In order to receive medical treatment under the American system an individual must have either private insurance or prove that they can afford to pay for any treatment received. Under the conditions of most insurance plans, individuals and businesses pay regular installments to cover health insurance, but then individuals are often required to pay part of the cost of their treatment. The high cost of healthcare has meant more than 40 million people in America are uninsured and many millions more are underinsured. More than half of all bankruptcies in 2009 came as the result of failure to meet medical expenses.

Supporter of a single-payer health care plan demonstrating in 2009.

Anyone that witnessed first hand the recent political confrontations and personal attacks that greeted Barack Obama’s attempt to reform the healthcare system can testify to the deep divisions the debate excites in American society. The hostilities and partisan divides exposed by Obama’s reform plan are not a new phenomenon and in fact stem from a long and bitter history of a one hundred year battle over healthcare. In order to fully appreciate the depth of feeling healthcare provokes it is necessary to consider America’s battle from the very beginning.

The American struggle over healthcare began at a time when other European nations had begun to establish sickness insurance programmes. The concept of compulsory sickness insurance emerged in Europe in the 1880s and won support within Austria, Hungary, Norway, Russia, Germany and Britain all of whom, by 1912, had some form of sickness insurance. Though a far cry from the national health programs that would flourish in Europe in the aftermath of the Second World War, compulsory health insurance meant that private insurance companies were required by law to offer affordable insurance plans to every citizen. In the same period the American federal government largely ignored the issue of healthcare, leaving regulation to state-wide bodies which allowed charity and private organisations free reign. It wasn’t until the 1912 campaign of Theodore Roosevelt’s Progressive Party that healthcare became a national political issue. With Theodore Roosevelt’s failure to win the election the cause of healthcare reform as a political issue lapsed into obscurity until the American Association of Labour, a powerful pressure group, began to circulate a proposed piece of healthcare legislation in 1915. Though the proposed bill won the support of the American Medical Association (possibly the first and last time this powerful medical lobby would support the call for increased regulation in healthcare) the reform floundered as American attention increasingly moved towards the battlefields of Europe.

In the wake of American involvement in the First World War public opinion shifted against the idea of public provision of healthcare as the American Medical Association launched high profile advertising campaigns denouncing public health insurance as being part of the “Prussian Menace”. Opponents of healthcare reform, in the 1920s, would use similar fear tactics to characterise public healthcare as a Bolshevik communist plot during the paranoid age of the first Red Scare. These alarmist statements would prove enduring, particularly during the Cold War, as opponents would label public healthcare as socialised medicine. This fear of anything socialist strengthened the American turn towards conservatism, a turn that followed the defeat of Woodrow Wilson. Any hope of a major change to the American healthcare system was delayed until the arrival of Franklin Roosevelt, following the Wall Street crash of 1929.

In pledging to establish a New Deal for the American people, Franklin Roosevelt’s called for a fundamental social and fiscal transformation that seemed to herald the possibility of broader access to healthcare in America. Roosevelt’s immediate priority, however, was to rejuvenate the economy and tackle high levels of unemployment. Consequently the 1935 Social Securities Act contained no major reforms of healthcare provision. While Roosevelt commissioned several committees to examine the healthcare system and hinted, in 1944, at plans for providing a universal government funded healthcare he failed to enact or complete any such reforms. Ultimately he left the image that healthcare reform was part of the unfinished legacy of the New Deal.

Picking up the fallen standard of the New Deal, Harry Truman came to office in 1945 proposing a radical reform of the unregulated and expensive healthcare system. Truman’s plan which constituted part of his Fair Deal agenda, envisaged the establishment of a publically funded national health insurance programme. Truman’s grandiose plans were stymied though by vociferous opposition from the American Medical Association and several major newspapers. During the 1950s the rampant internal anticommunist stance of McCarthism made any resurrection of Truman’s reforms unlikely. Though the costs of health insurance continued to soar under the Eisenhower and Kennedy administrations neither president proposed any major reforms to transform healthcare. The most major healthcare overhaul in the 20th century would occur under Kennedy’s successor Lyndon Baines Johnson.

Lyndon Baines Johnson saw finding a solution to America’s healthcare problems as a significant part of his vision to combat all forms of inequity in American life, a vision he referred to as the Great Society. Even Johnson, the master of backroom deals and congressional manipulation, shied away from reforms on the scale proposed by Harry Truman. Instead, Johnson would create the Medicare and Medicaid programmes. Medicare and Medicaid helped provide government subsidised health insurance for the over 65s and for those unable to afford emergency care. The reforms passed congress in spite of a massive lobbying effort led by the American Medical Association. Johnson signed the act into law in July 1965, with Harry Truman alongside him. Though the formation of Medicare and Medicaid helped to reduce the burden of healthcare costs for those most in need, they failed to regulate or reduce the rising cost of healthcare.

In many ways the passing of Medicare and Medicaid represented the high water mark of universal healthcare reform. Successive presidents then failed to regulate healthcare providers or to reduce costs. Both Richard Nixon and Jimmy Carter produced only token efforts at healthcare reform and the increasingly isolated liberal voices in congress, such as Edward Kennedy, failed to gain popular support with their suggested reforms. With the resurgence of conservatism under Ronald Reagan reforms were postponed as retrenchment became the buzz word in Washington. The weakening economy of the early 1990s and increasingly astronomical healthcare costs allowed healthcare reform to return to the agenda with the arrival of Bill Clinton in the White House.

Barack Obama and senior staff celebrate the passing of the healthcare reform bill.

With the return of the Democratic Party to the presidency in 1992 fundamental reform of healthcare seemed politically more viable. Bill Clinton announced his plans for healthcare reform in 1993 with much fanfare and appointed his wife, Hilary, as head of the task force entrusted with producing a report. After considering the advice of over 600 experts and policy advisers Hilary’s task force drafted a bill of more than 1400 pages, a bill that was immediately sent to Congress for its approval. The proposed reforms aimed to establish universal healthcare insurance for all American citizens by regulating private insurance companies. The bill was abandoned in 1994 after a concerted Republican effort to prevent the passage of the bill. In proposing similar reforms nearly a decade later Barack Obama would attempt to avoid the political mistakes that had so dogged Clinton’s attempts at reform.

Barrack Obama came to office pledging, as Bill Clinton had done before him, to radically transform healthcare provision and bring down overall expenditure. Unlike Clinton however Barrack Obama took a far less active role in formulating the proposals preferring instead to delegate the drafting of the actual legislation to congressional committees. The senate committee, chaired by Edward Kennedy, was the first committee to deliver its proposals and it was the bulk of these proposals that formed the original bill. After months of intense debate and political compromise the Patient Protection and Affordable Care Act was passed by Congress in 2010, albeit after many of its initial proposals had been watered down. At its heart the act contained many elements of Bill Clinton’s failed reforms and promised to implement the phased introduction of universal coverage by subsidising healthcare and making it illegal for health insurance companies to refuse insurance to individuals. As yet the legacy and impact of these reforms are difficult to gauge as many individual states have challenged the legislation in the courts and all of the 2012 Republican presidential candidates are campaigning to repeal the legislation should they win election.

In looking at the long history of attempts to reform healthcare provision and regulate a largely unfettered market it is clear that high healthcare costs and large numbers of individuals who are uninsured are not a recent political development. When viewed in the context of a hundred year struggle against various lobby groups and conservative opposition Joe Biden’s overheard comment that the Obama healthcare bill was a ‘big f*****g deal’ seems more understandable although no less cringe inducing.

The problems of healthcare have not gone away and much like all previous changes, the current reforms seem to offer no long-term solutions to the unsustainable costs of medical care. In light of this and the nature of opposition to increased regulation in healthcare, one suspects that Harry Truman’s dream of establishing comprehensive single healthcare scheme in America along the British or Canadian model will remain at present the idealistic quixotic crusade of the Democratic Party.

Today, with American healthcare workers and pharmaceutical companies being the best rewarded of any in the world, it has become increasingly difficult for any president to combat the powerful lobbying that such wealth can afford.

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