History of health care reform in the United States The issue of health insurance reform in the United States has been the subject of political debate since the early part of the 20th century. Recent reforms remains an active political issue. Alternative reform proposals were offered by both of the two major candidates in the Federal Reform Efforts 19th century One 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, deaf, and dumb, via federal land grants to the states. This bill was proposed by activist Dorothea Dix, which 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 believed was properly the responsibility of the states. After the Civil War, the federal government did establish the first system of national 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, DC remained in operation until the late nineteenth-century before it became part of Howard University. 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. U.S. efforts to achieve universal coverage began with Theodore Roosevelt, who had the support of progressive health care reformers in the 1912 election but 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. The American Medical Association (AMA) was also deeply and vocally opposed to the idea. 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 thirdparty insurers. During World War II, Henry Kaiser used an arrangement in which doctors by passed tradition 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. Following the second 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.
18 New Jersey Physician