Red scares and health care

PHIL GASPER examines what will it take to win guaranteed national health insurance in the United States

MICHAEL MOORE’S magnificent documentary Sicko has exposed the gross failures of the U.S. health care system and helped spark renewed calls for a national health insurance program. Despite the fact that the U.S. spends much more on health care than any other country in the world, nearly 50 million Americans lack health coverage and, according to the World Health Organization, the U.S. ranks a miserable thirty-seventh in terms of life expectancy, child mortality, and other basic indicators. Nearly every other industrialized country spends less, guarantees coverage for all its residents, and produces better results.

Polls consistently show that a large majority of Americans support a government-financed national health program. The simplest version of such a system exists in Canada, where the government provides health insurance for the entire population and private insurers are restricted to offering supplemental coverage. The Canadian system saves money in two ways. First, providers are forced to keep their prices down because the government is the only direct purchaser of their services. Second, there are huge savings in administrative costs. Health providers only have to deal with a single payer, rather than with more than 1,500 private U.S. insurance companies, and the insurance system itself is greatly simplified. According to health experts David Himmelstein and Steffie Woolhandler, a “typical U.S. hospital has fifty billing clerks and a million-dollar computer keeping track of and sending bills. The typical Canadian hospital employs about three billing clerks whose main job is to bill Americans who wander across the border.”

In 1991, the non-partisan Congressional General Accounting Office (GAO) reported that “if the universal coverage and single-payer features of the Canadian system were applied in the United States, the savings in administrative costs alone would be more than enough to finance insurance coverage for the millions of Americans who are currently uninsured. There would be enough left over to permit a reduction, or possibly even the elimination, of co-payments and deductibles.” The Canadian system is not perfect, but such a system would offer a much less wasteful way of providing health care and be an enormous step forward for U.S. workers.

But if the advantages of a single-payer system are so clear, why is no major mainstream political figure in the U.S. advocating it? While the frontrunners for the Democratic presidential nomination all say they are in favor of universal coverage, none of them is prepared to take on the vested interests that benefit from the current system, and they are proposing hybrid solutions that leave the private insurance industry intact. The liberal lobbying group MoveOn.org recently claimed that the Democratic presidential candidates are offering “the most forward-thinking proposals [on health care] ever seen in a presidential race.” A brief look at the historical record, however, shows that this is far from the case.

As long ago as 1912, former Republican president Theodore Roosevelt, running as the presidential candidate of the newly formed Progressive Party, proposed a plan for national health insurance. In doing so, Roosevelt was taking a leaf from the book of the archconservative former German chancellor Otto von Bismarck, who introduced the first government-funded health insurance program in the 1880s, in an effort to undercut growing support for the socialist movement in his country. Similarly, Roosevelt belonged to a section of the U.S. ruling class that believed that government regulation and reform were necessary to defuse working–class militancy, typified by the “bread and roses” textile strike in Lawrence, Massachusetts, which resulted in a victory for the workers just a few months before the 1912 election. The mood was also reflected in the support for the Socialist Party’s charismatic candidate for president, Eugene V. Debs, who won close to a million votes, 6 percent of the total.

Roosevelt lost the election to Woodrow Wilson, but reformers at the state level took up his call for a government-funded health program. Legislation for compulsory health insurance for lower-income workers was introduced in numerous states, including California and New York. While some progressive doctors helped write the bills, the American Medical Association (AMA) opposed them, fearing that government regulation would infringe on physicians’ autonomy. The AMA allied itself with major insurance companies, including Prudential and Metropolitan, to block the legislation. Even though private health insurance did not yet exist, the insurance industry was concerned that profits from life insurance and funeral benefits policies might decline. The National Association of Manufacturers, whose members objected to contributing to their workers’ medical expenses, also mobilized against the legislation, eventually blocking its passage across the country.

With the U.S. entry into the First World War, the opponents of public health insurance first portrayed it as a German idea, so that support for it was “unpatriotic.” Following the Russian Revolution at the end of 1917, however, the rhetoric switched. In New York, the state Senate passed a health insurance bill in 1919, but it never came to a vote in the Assembly, where it was attacked as “Bolshevistic.” The New York Times and other newspapers made similar accusations.

The attacks on health care legislation took place in an atmosphere of growing anticommunist hysteria, orchestrated in response to a huge strike wave, including a national steel strike in 1919 that followed the end of the war. Using a series of anarchist bombings as an excuse, Wilson’s attorney general, Alexander Palmer, rounded up thousands of immigrants with suspected radical ties, eventually deporting several hundred of them, including some with permanent resident status.
Meanwhile, organized labor, which might have acted as a counterweight to the opponents of public health insurance, was badly divided on the issue. While several individual unions, such as the United Mine Workers, were strong supporters, the American Federation of Labor (AFL), led by the conservative Samuel Gompers, denounced state-mandated health insurance as “a menace to the rights, welfare, and liberty of American workers,” and joined employers’ organizations in opposing it.
The idea of national health insurance reemerged with the onset of the Great Depression at the end of the 1920s. Franklin Delano Roosevelt was elected president in 1932 on a conservative platform, but was rapidly pushed by events to pursue more radical policies, which became known as the New Deal. In 1934 he appointed the Committee on Economic Security (CES), charged with finding solutions to mass unemployment and poverty. The CES proposed a system of Social Security that included a national health insurance plan, but Roosevelt got cold feet as the AMA and its allies began campaigning against this part of the proposal. Rather than challenge their arguments, Roosevelt dropped the health care plan from the Social Security bill he eventually sent to Congress in 1935.

After the Second World War, however, the issue once again moved to the center of the national political agenda. Soon after becoming president following Roosevelt’s death in April 1945, Harry S. Truman, eager to create his own distinctive legacy and concerned that over a third of those drafted during the war had been physically unfit to serve, made national health insurance a central plank of his proposed Fair Deal. Opinion polls showed that Truman’s proposal had enormous support, but in 1946, the Republicans won control of Congress and Truman’s domestic reform agenda was stymied. Two years later, however, Truman won an upset victory in the presidential election and the Democrats recaptured both the House and the Senate with large majorities. Yet despite this, national health insurance was never passed.

The Democratic Party was an unprincipled coalition between Northern liberals and Southern racist “Dixiecrats,” and the latter were opposed to a national health plan, which they thought would be used to desegregate hospitals in the South. But the Dixiecrat obstacle might have been overcome if Truman had mobilized popular sentiment in favor of his proposal. Instead, Truman’s own actions ensured this would not happen. As early as 1946 (four years before Wisconsin Senator Joseph McCarthy made his own accusations of communists in the government), the president began fanning the flames of a new red scare by initiating a loyalty board to vet federal job applicants for left-wing ties. The following year, he launched the Cold War against a supposed worldwide “communist threat.” The hysterical atmosphere that Truman helped to create made it easier for opponents of national health care to depict it as “communist-inspired,” un-American, and an attack on individual freedom. Support for Truman’s proposal, which the AMA derided as “socialized medicine,” fell from 75 percent in 1945 to 21 percent four years later, and the legislation never passed.

If organized labor had campaigned strongly for national health insurance, the outcome might have been different. But in 1947 as anticommunist hysteria grew, unions affiliated with the Congress of Industrial Organizations (CIO), which had split from the more conservative AFL in the 1930s, began to purge communists, socialists, and other radicals from their ranks—the very people who might have organized such a struggle. The biggest unions focused instead on winning private health insurance from their employers, and their support for Truman’s plan was lukewarm at best.

It was not until the AFL and CIO merged in 1955 that unions began acting in a concerted way to win government benefits to fill gaps not covered by private insurance. That year they were instrumental in the passage of limited disability insurance, over the opposition of the AMA. Ten years later, the labor movement was central to the passage of legislation establishing Medicare (for the elderly) and Medicaid (for the poor), once again over the vehement opposition of the AMA. The task was made easier by the fact that the insurance industry was split over the question (because senior citizens were seen as an unprofitable sector of the market), and by qualified support from the American Hospital Association (whose members were subsidizing care for the old), but as the sociologist Jill Quadagno notes, “there is little doubt that the trade unions paved the way for the final Medicare vote.”

By the early 1990s, it was becoming obvious that private, employment-based insurance was deeply flawed. Not only were tens of millions of people without coverage, health-care costs were spiraling out of control, cutting into the profits of some major corporations. The business friendly Economist magazine concluded, “Private insurance has been disastrous: it makes it impossible to ensure either universal coverage or the control of costs.” Calls for a government-run, single-payer insurance system were renewed by some of the biggest unions. Even some business leaders began toying with the idea.

Bill Clinton was elected president in 1992 promising that he would establish universal health coverage, but it soon became clear that the single-payer option was off the table. When told that 70 percent of the population supported a single-payer system, Hillary Rodham Clinton—who was put in charge of the reform effort—responded, “Tell me something interesting.” Instead, the Clintons proposed a complex system of “managed competition,” based on regulated competition between the biggest insurers in an effort to control costs without challenging the profits of the health insurance industry. But while managed competition would have benefited the biggest insurance companies, smaller insurers launched a well-financed advertising campaign that helped to defeat it. Once again, if there had been an independent movement for a single-payer system, the debate could have been pushed to the left. But believing they were being realistic, even unions that supported single-payer lined up behind the doomed Clinton plan, and the political moment was lost.

Today, there is again a real opportunity to build a campaign for national health insurance. In the wake of Sicko, local committees began forming around the country and the California Nurses Association (CNA) launched a campaign to mobilize health-care workers, signing up thousands within a few weeks. Responding to the mood, the AFL-CIO appointed CNA’s executive director, Rose Ann DeMoro, as one of its national vice presidents and announced plans for a major national health-care reform campaign. The movement is in its infancy, but if community groups build links with union activists, maintain their independence from the Democrats, and refuse to compromise on their basic demands, there will be a chance of winning a major reform.