The history of health care reform in the United States has spanned many decades with health care reform having been the subject of political debate since the early part of the 20th century. Recent reforms remain an active political issue. Alternative reform proposals were offered by both of the major candidates in the 2008, 2016, and 2020 presidential elections.
Federal health care proposals
Late 18th century On July 16, 1798, President John Adams signed the first Federal public health law, "An act for the relief of sick and disabled Seamen." This assessed every seaman at American ports 20 cents a month. This was the first prepaid medical care plan in the United States. The money was used for the care of sick seamen and the building of seamen's hospitals. This act created the Marine Hospital Service under the Department of the Treasury. In 1802 Marine Hospitals were operating in Boston; Newport; Norfolk; and Charleston, S.C. and medical services were contracted in other ports.
19th century
Another of the earliest health care proposals at the federal level was the 1854 Bill for the Benefit of the Indigent Insane, which would have established asylums for the indigent insane, as well as the blind and deaf, via federal land grants to the states. This bill was proposed by activist Dorothea Dix and passed both houses of Congress, but was vetoed by President Franklin Pierce. Pierce argued that the federal government should not commit itself to social welfare, which he stated was the responsibility of the states.
After the American Civil War, the federal government established the first system of medical care in the South, known as the Freedmen's Bureau. The government constructed 40 hospitals, employed over 120 physicians, and treated well over one million sick and dying former slaves. The hospitals were short-lived, lasting from 1865 to 1870. Freedmen's Hospital in Washington, D.C. remained in operation until the late nineteenth century when it became part of Howard University.Jim Downs, Sick from Freedom, New York, Oxford University Press, 2012.
In 1890, then president Benjamin Harrison voiced his support for a fund that would provide working people with security against incapacity caused by old age, accident or sickness. Speeches of Benjamin Harrison, Twenty-third President of the United States A Complete Collection of His Public Addresses from February 1888, to February, 1892, Chronologically Classified : Embracing All His Campaign Speeches, Letter of Acceptance, Inaugural Address, and the Numerous Speeches Delivered During His Several Tours : Also Extracts from His Messages to Congress By Benjamin Harrison, 1892, P.158
The next major initiative came in the New Deal legislation of the 1930s, in the context of the Great Depression.
1900s–1920s In the first 10–15 years of the 20th century Progressivism was influencing both Europe and the United States. Many European countries were passing the first social welfare acts and forming the basis for compulsory government-run or voluntary subsidized health care programs. The United Kingdom passed the National Insurance Act of 1911 that provided medical care and replacement of some lost wages if a worker became ill. It did not, however, cover spouses or dependents. As early as the 1912 presidential election, former president Theodore Roosevelt vaguely called for the creation of a national health service in the 15th plank of his Progressive Party platform. However, neither Roosevelt nor his opponents discussed health care plans in detail, and Roosevelt lost the election to Woodrow Wilson. A unique American history of decentralization in government, limited government, and a tradition of classical liberalism are all possible explanations for the suspicion around the idea of compulsory government-run insurance. The American Medical Association (AMA) was also deeply and vocally opposed to the idea, which it labeled "socialized medicine". In addition, many urban US workers already had access to sickness insurance through employer-based sickness funds.
Early industrial sickness insurance purchased through employers was one influential economic origin of the current American health care system. These late-19th-century and early-20th-century sickness insurance schemes were generally inexpensive for workers: their small scale and local administration kept overhead low, and because the people who purchased insurance were all employees of the same company, that prevented people who were already ill from buying in. The presence of employer-based sickness funds may have contributed to why the idea of government-based insurance did not take hold in the United States at the same time that the United Kingdom and the rest of Europe was moving toward socialized schemes like the UK National Insurance Act of 1911. Thus, at the beginning of the 20th century, Americans were used to associating insurance with employers, which paved the way for the beginning of third-party health insurance in the 1930s.
1930s–1950s With the Great Depression, more and more people could not afford medical services. In 1933, Franklin D. Roosevelt asked Isidore Falk and Edgar Sydenstricter to help draft provisions to Roosevelt's pending Social Security legislation to include publicly funded health care programs. These reforms were attacked by the American Medical Association as well as state and local affiliates of the AMA as "compulsory health insurance." Roosevelt ended up removing the health care provisions from the bill in 1935. Fear of organized medicine's opposition to universal health care became standard for decades after the 1930s.
During this time, individual hospitals began offering their own insurance programs, the first of which became Blue Cross. Groups of hospitals as well as physician groups (i.e. Blue Shield) soon began selling group health insurance policies to employers, who then offered them to their employees and collected premiums. In the 1940s Congress passed legislation that supported the new third-party insurers. During World War II, industrialist Henry J. Kaiser used an arrangement in which doctors bypassed traditional fee-for-care and were contracted to meet all the medical needs for his employees on construction projects up and down the West coast. After the war ended, he opened the plan up to the public as a non-profit organization under the name Kaiser Permanente.
During World War II, the federal government introduced wages and price controls. In an effort to continue attracting and retaining employees without violating those controls, employers offered and sponsored health insurance to employees in lieu of gross pay. This was a beginning of the third-party paying system that began to replace direct out-of-pocket payments.
Following the war, Harry S. Truman became the first U.S. president to include national health insurance in his domestic agenda. As part of his Fair Deal program, Truman supported the Wagner-Murray-Dingell Bill, which included a system of government health insurance. The bill was supported by labor unions and opposed by the American Medical Association, who denounced the proposal as "socialized medicine". Though repeatedly introduced into Congress, the bill never advanced beyond the committee hearing stage.
In 1946, the National Mental Health Act was passed, as was the Hospital Survey and Construction Act, or Hill-Burton Act. In 1951 the IRS declared group premiums paid by employers as a tax-deductible business expense, which solidified the third-party insurance companies' place as primary providers of access to health care in the United States.
In his 1947 book "Where I Stand!", ex-governor of Minnesota and perennial Republican Party candidate Harold Stassen suggested that everyone on Social Security be provided with insurance and that the heaviest hospital and medical bills ought to be paid through a federal-state insurance approach.Where I Stand!, Harold E. Stassen, 1947 Henry A. Wallace, vice-president under Roosevelt from 1941 to 1945 and candidate of the left-wing Progressive Party in 1948, supported a national health insurance plan for all Americans.
1960s–1980s
1960s In the Civil Rights era of the 1960s and early 1970s, public opinion shifted towards the problem of the uninsured, especially the elderly. Since care for the elderly would someday affect everyone, supporters of health care reform were able to avoid the worst fears of "socialized medicine," which was considered a dirty word for its association with communism. After Lyndon B. Johnson was elected president in 1964, the stage was set for the passage of Medicare and Medicaid in 1965. Johnson's plan was not without opposition, however. "Opponents, especially the AMA and insurance companies, opposed the Johnson administration's proposal on the grounds that it was compulsory, it represented socialized medicine, it would reduce the quality of care, and it was 'un-American.'" These views notwithstanding, the Medicare program was established when the Social Security Amendments of 1965 were signed into law on July 30, 1965, by President Lyndon B. Johnson. Medicare is a social insurance program administered by the United States government, providing health insurance coverage to people who are either age 65 and over, or who meet other special criteria.
1970s In 1970, three proposals for single-payer universal national health insurance financed by payroll taxes and general federal revenues were introduced in the U.S. Congress. In February 1970, Representative Martha Griffiths (D-MI) introduced a national health insurance bill—without any cost sharing—developed with the AFL–CIO. In April 1970, Senator Jacob Javits (R-NY) introduced a bill to extend Medicare to all—retaining existing Medicare cost sharing and coverage limits—developed after consultation with Governor Nelson Rockefeller (R-NY) and former Johnson administration HEW Secretary Wilbur Cohen. In August 1970, Senator Ted Kennedy (D-MA) introduced a bipartisan national health insurance bill—without any cost sharing—developed with the Committee for National Health Insurance founded by United Auto Workers (UAW) president Walter Reuther, with a corresponding bill introduced in the House the following month by Representative James Corman (D-CA). In September 1970, the Senate Labor and Public Welfare Committee held the first congressional hearings in twenty years on national health insurance.
During his time as Secretary of Health, Education, and Welfare, Elliot Richardson (R-MA) worked on a universal health program plan that could have been administrated through either the federal government or private insurers. Families would have shared costs with the program through income-based payments. The plan lost consideration when Nixon decided to replace Melvin Laird as Secretary of Defense with Richardson.