History of Healthcare in U.S.

Freedmen's Bureau (post Civil War)

After the 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.

American Medical Association (AMA)

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.

World War II & Henry Kaiser

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.

World War II & Benefits

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.

Blue Cross & Blue Shield (1940s)

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.

Industrial Sickness Insurance (late 19th/early 20th Century)

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.

Harry Truman & Fair Deal (1940s/50s)

Following the world war, President Harry Truman called for universal health care as a part of his Fair Deal in 1949 but strong opposition stopped that part of the Fair Deal. However, 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.

Single-Payer Universal National Health Insurance Proposals (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.

Senator Kennedy's 1979 Proposal

In May 1979, Kennedy proposed a new bipartisan universal national health insurance bill—choice of competing federally-regulated private health insurance plans with no cost sharing financed by income-based premiums via an employer mandate and individual mandate, replacement of Medicaid by government payment of premiums to private insurers, and enhancement of Medicare by adding prescription drug coverage and eliminating premiums and cost sharing. In June 1979, Carter proposed more limited health insurance reform—an employer mandate to provide catastrophic private health insurance plus coverage without cost sharing for pregnant women and infants, federalization of Medicaid with extension to the very poor without dependent minor children, and enhancement of Medicare by adding catastrophic coverage. In November 1979, Long led a bipartisan conservative majority of his Senate Finance Committee to support an employer mandate to provide catastrophic-only private health insurance and enhancement of Medicare by adding catastrophic coverage, but abandoned efforts in May 1980 due to budget constraints in the face of a deteriorating economy.

Nixon & Social Security Amendments (1972)

In October 1972, Nixon signed the Social Security Amendments of 1972 extending Medicare to those under 65 who have been severely disabled for over two years or have end stage renal disease (ESRD), and gradually raising the Medicare Part A payroll tax from 1.1% to 1.45% in 1986. In November 1972, Nixon won re-election in a landslide over the only Democratic presidential nominee not endorsed by the AFL-CIO in its history, Senator George McGovern (D-SD), who was a cosponsor of the Kennedy-Griffiths bill, but did not make national health insurance a major issue in his campaign.

Lyndon Johnson & Medicare/Medicaid (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.

Progressivism in Early 1900s

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. U.S. efforts to achieve universal coverage began with progressive health care reformers who supported Theodore Roosevelt for President in 1912, though he was defeated. Progressives campaigned unsuccessfully for sickness insurance guaranteed by the states. 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.

John Adams & Earliest Proposal

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 monies were 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.

Patient Protection and Affordable Care Act (or "Obamacare")

Require most U.S. citizens and legal residents to have health insurance. Create state-based American Health Benefit Exchanges through which individuals can purchase coverage, with premium and cost-sharing credits available to individuals/families with income between 133-400% of the federal poverty level (the poverty level is $19,530 for a family of three in 2013) and create separate Exchanges through which small businesses can purchase coverage. Require employers to pay penalties for employees who receive tax credits for health insurance through an Exchange, with exceptions for small employers. Impose new regulations on health plans in the Exchanges and in the individual and small group markets. Expand Medicaid to 133% of the federal poverty level.

Great Depression & Franklin Roosevelt (1930s)

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.