Roosevelt toyed with the idea of nationalizing healthcare as part of his plan for Social Security. However, he was a politically astute man, and he realized that tying universal health coverage to the Social Security Act m ight doom both initiatives to failure.
Of course, Roosevelt's decision left unresolved the pressing need of many Americans for some way to deal with healthcare costs. In the grips of the Great Depression, many were hard pressed to find money for essentials like food and shelter. Healthcare often fell by the wayside for families working to access the basic necessities of life.
Into this environment came the beginnings of private health insurance. Blue Cross and Blue Shield plans paved the way for private insurers to begin crafting plans to meet the needs of the growing market. Still, at this stage, employers were not generally in the picture, and these original health insurance offerings were purchased almost exclusively by individuals.
Once America became embroiled in World War II, there was great concern that rampant inflation would threaten America's military effort and undermine its domestic economy. The concern was valid, as Americans had witnessed what inflation had done to war-torn Germany, devastating its economy and giving rise to Hitler's regime. To combat inflation, the Stabilization Act was passed.
Designed to limit employers' freedom to raise wages and thus to compete on the basis of pay for scarce workers, the actual result of the act was that employers began to offer health benefits as incentives instead.
Suddenly, employers were in the health insurance business. Because health benefits could be considered part of compensation but did not count as income, workers did not have to pay income tax or payroll taxes on those benefits. Thus, by , employers had an increased incentive to make health insurance arrangements for their workers, and the modern era of employer-sponsored health insurance began, a pivotal point in the History of Healthcare in America.
The s saw the expansion of healthcare coverage options, as strong labor unions began to bargain for better benefit packages. Major medical plans evolved during this era, with vision care becoming a popular option in and dental benefits becoming an offering in This created a serious situation for retirees, however.
Because employer-sponsored healthcare had now become the cornerstone of the entire American healthcare system, health costs fell victim to inflation, and retired Americans found themselves unable to afford private coverage.
In , Lyndon Johnson created the Medicare and Medicaid systems to address the issue of healthcare for retirees and for those working in low-paying jobs for companies that did not offer healthcare benefits. By the late 60's and early 70's, it was becoming increasingly clear that healthcare reform was in order. In , Senator Edward Kennedy proposed a single-payer plan that would have likely expanded nationalized healthcare to every American.
Nixon had his own plan, and it appeared that healthcare reform would happen. However, Watergate derailed that plan, and healthcare reform took a back seat to other national policy issues for the following decades. With Bill Clinton's election to the presidency in , healthcare once again took center stage in the national debate. Putting his wife, Hillary Clinton, in charge of promoting his health insurance reform plan known as the Health Security Act, Clinton intended to enact legislation that would require virtually all Americans to enroll in a health policy, which would be managed by regional purchasing cooperatives.
By , Clinton's plan died in Congress, largely because it was considered too radical an overhaul of the healthcare system. This left the major portion of healthcare still in the hands of employers. To deal with the growing number of employers who were dropping coverage because of rampant inflation, the HMO as we know it today was born. Employees were generally unhappy with managed care options, as they wanted greater autonomy concerning their health decisions.
Meanwhile, healthcare costs continued to rise. In , in response to the crisis state of American healthcare, President Obama signed into law the Affordable Care Act. While it remains to be seen what the long-term effects of Obamacare will be, there is little doubt that we are in the midst of a new chapter in America's turbulent healthcare history. The economic strain caused by the COVID coronavirus pandemic has complicated the challenges employers face when managing their employee benefits program and forecasting health care costs for their employees.
By the s, a majority of Americans received their health insurance through their employers, a development that began only in the early s. Yet, relying on employment as a method to obtain health insurance left many behind: the elderly, unemployed or those who cannot work for other reasons, and of course, children.
Still any attempts to expand insurance through means unrelated to employment were met with fierce resistance. With the passage of the Affordable Care Act, which as designed would have required states to expand Medicaid eligibility to low-income Americans, 26 states successfully sued the federal government to avoid this requirement. While many initially reluctant states eventually chose to expand, to date, 14 states have not expanded Medicaid, leaving many low-income Americans uninsured.
Furthermore, under the Trump administration, states have successfully petitioned to add work requirements to Medicaid accessibility, a harmful and unproven measure, most recently struck down in Michigan by the US District Court in Washington, DC.
While employer sponsored health insurance is popular in the US, it is expensive, inefficient, and favors high earners. While the employer pays much of this, on average over a quarter of premiums are paid by employees, in addition to ever-increasing copays, deductibles, and other forms of cost sharing. Yet these benefits are not taxed, a long-standing tax quirk that disproportionately benefits higher earners with higher tax brackets.
Furthermore, there is little incentive for efficiency and cost-saving measures in employer-based insurance, as high spending on health insurance is simply translated into higher premiums. Employment-sponsored insurance favors insurance companies and those in high-paying jobs.
It has many downsides, including promoting job-lock, hindering innovation, and keeping salaries low. It also, as we see now, is incredibly ill-suited for a widespread public health catastrophe like the COVID pandemic.
Opinions can change, and we should not let the health insurance industry be the primary shaper of public opinion on who deserves health insurance.
Expediency creates new priorities, and reshapes deep-seated political beliefs. The aftermath of the coronavirus pandemic should be an opportunity to rethink our overreliance on employment as a measure of value, and as a gateway to healthcare.
COVID has destabilized employment-based insurance. Facing a pandemic, a recession, and an election, Americans have the opportunity to break the link entirely and empower consumers to shop on open insurance marketplaces. Now, more than ever, Americans need affordable access to health insurance and the economic security that would come with controlling their own health insurance destiny. Akshaya Kannan, M. View the discussion thread.
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