December 9, 2020 by Katie Wilson

How did we get here? A brief history of healthcare and formation of ACA

This is the second in a series of brief articles by members of the Southern Maine Workers Center’s Health Care is a Human Right Committee. We have covered current challenges to the Affordable Care Act (ACA), the ACA in the broader context of American health care history, and will soon cover how successful or not the ACA has been in providing healthcare for working people as well as what the path to Universal Healthcare could look like.

The concept of universal health care may feel like a recent issue, given the din of opposition in the United States, but the idea dates back more than a century. In the late 19th century, European nations, including Germany, Austria, Britain, and Hungary, crafted some of the first health insurance systems: compulsory sickness insurance for workers. It is important to note that the terms ‘health care’ and ‘health insurance’ refer to separate concepts and will be referred to as such in this article. ‘Health care’ is used to describe the combination of systems & measures that ensure the health of an individual, e.g. preventative care, medical treatment, and public health measures. ‘Health insurance’ refers directly to a financial system created to cover the cost of medical treatments –– it often doesn’t afford those who are insured the right to comprehensive care. These programs weren’t universal and were created as a means of protecting workers against the loss of wages, but they formed the basis of what would become universal health policies in European nations and abroad post-1912. 

Yet America lagged behind. At the start of the 20th century, the U.S. federal government offered neither subsidies nor sick insurance to its citizenry; states were tasked with providing healthcare to their residents, and they often shifted this burden to private and volunteer-run programs. As workplace injuries became commonplace during the Industrial Revolution, though, unions gathered greater bargaining power . In an effort to protect union members from massive financial losses, the American Association of Labor Legislation (AALL) drafted a model healthcare bill in 1915. The bill ensured members of the working class and their dependents would receive medical services, sick pay, maternity benefits, and a death benefit. By 1917, the bill had been brought before 12 state legislatures. Progressive reformers’ arguments for compulsory health coverage began to gain wider support. 

Originally, the American Medical Association– a group of physicians and medical providers that gathered power in the 20th century– came out in full support of compulsory health insurance. Despite their help in crafting the AALL bill– and their publicly stated support– the AMA soon changed their tune. State medical societies were adamantly opposed to the bill, as they feared physicians wouldn’t receive fair compensation, and the AMA rescinded its support in response. 

Concurrently, in 1917, the U.S. entered World War I. Anti-German propaganda, pedaled by members of the U.S. government, began to shape public perception of Germany’s “socialist insurance.” Conservative members of the government who opposed compulsory health coverage capitalized on this propaganda and branded the system as communitisty, and inherently Bolshevik. Thus, in the early 1920s, the burgeoning support for compulsory health coverage began to wane

The Great Depression altered the priorities of the American government once again– adding greater urgency to demands for healthcare coverage, specifically for the elderly and unemployed — and Franklin Delano Roosevelt (FDR) began work on drafting a healthcare bill. The Social Security Act of 1935 provided some of the first support for the retired and elderly. The health insurance portion of the bill, however, was dropped after the AMA again came out in opposition. 

Employer-sponsored health insurance, as we know it today, arose in the 1940s. Government attention was redirected from the debate surrounding public-funded healthcare to the economic impacts of World War II. The Stabilization Act of 1942, intended to prevent inflation by minimizing wage increases, meant that employers had to find new ways to recruit new workers and keep their current employees. In response, they came up with employer-sponsored health insurance. After the war came to a close, this form of insurance gained popularity, but it excluded some of the more vulnerable members of society (individuals who were unemployed, retirees, and individuals with disabilities). FDR continued his efforts to pass universal health care but was met with continued opposition from the AMA and conservatives in power.

The next decade was characterized by a series of attempts at creating national health insurance– all of which were unsuccessful. While the national healthcare debate raged on, medical costs skyrocketed as medical advancements continued. During the 1950s, hospital care costs more than doubled. For individuals able to afford it, private health insurance became commonplace.

It wasn’t until the 1960s that those in favor of national health insurance received a major win: the Social Security Act of 1965 was passed, laying the groundwork for modern-day Medicaid and Medicare programs. The 1970s bore rise to increasing concerns around the financial impact of health insurance and medical services in the U.S. Inflation, coupled with the expansion of hospitals and medical technology, made healthcare costs spike rapidly. In response, the debate around national healthcare coverage evolved– Senator Ted Kennedy and then-President Richard Nixon both brought plans for national health insurance to the table. Nixon proposed a plan which would require employers to offer health insurance to their employees and which would subsidize the costs of insurance for employers who couldn’t afford to insure their employees; Kennedy favored a single-payer plan which would be funded through taxes (similar to Medicare for All). Neither plan won out– negotiations between Kennedy & Nixon eventually broke down and were further stymied by the impeachment of Nixon in 1974. 

The 1980s, ‘90s, and early 2000s were characterized by small improvements and expansions to America’s existing healthcare system (or lack thereof). President Reagan successfully passed COBRA, which allows former employees to continue to be enrolled in their previous employer’s group health plan if they agree to pay the full premium, and President Clinton expanded Medicaid. Clinton’s attempt to pass the Health Security Act of 1993, which included aspects of universal coverage while leaving the private insurance system intact, was unsuccessful. 

The Second Iraq War overshadowed the healthcare debate in the early 2000s. It wasn’t until the 2008 election loomed on the horizon that the debate retook its place on the national stage. President Barack Obama ran on a platform of healthcare reform. Upon taking office in 2009, he made it a priority to propose a new healthcare bill. This bill closely resembled the bill put forward by President Nixon: it mandated that [some] large employers provide health insurance, established an open Marketplace, in which insurance companies could not deny coverage based on pre-existing conditions, and stipulated that American citizens earning less than 400 percent of the poverty level would receive subsidies to help cover the cost of insurance. Additionally, it mandated that all Americans have some form of health insurance. 

In March of 2010– after months of debate and multiple revisions in the House and Senate– President Obama signed the Patient Protection and Affordable Care Act, often referred to as the Affordable Care Act (ACA), into law. After nearly a century of back-and-forth, and multiple failed attempts, the United States had passed some semblance of national health insurance coverage. Rather than ensuring all Americans comprehensive healthcare – provided by the state regardless of employment status –,  the ACA expanded access to private health insurance. Following its enactment in 2010, the number of uninsured Americans dropped from 47 million to 27 million by 2016. Today however, nearly 30 million Americans remain uninsured, with few means to access the care that we at the Southern Maine Workers’ Center believe they deserve; health care is a human right.