Wrangling over the US government’s role in funding healthcare is into its second century. The Affordable Healthcare Act is in the news for arguably driving premiums so high that healthcare is sliding to the brink of unaffordability.
The history of federally funded health care shows how the United States got swamped in this morass. Germany’s workers have had some form of compulsory sickness insurance since 1883. Forms of national health insurance have covered other Europeans since 1912. Marxism and socialism were sweeping the continent, and governments initiated health-coverage programs, in part, for income protection, ensuring political stability, and gaining political favoritism among workers.
Not much was happening in the US arena until the mid-twentieth century; health insurance was left to the private sector with some voluntary community funds for sickness and death. Working-class support for national health insurance had not coalesced in the United States as it had in Europe. Opponents included commercial insurance companies, most state medical societies, and the American Medical Association. National health insurance opponents couched their rhetoric in anticommunist terms, stalling it for decades.
Meanwhile, when a sick American worker was unable to work, the family fell into poverty. Concomitantly, in the 1920s and ‘30s, medical care and hospital costs were on the rise. Efforts to pass different national health insurance bills stalled in Congress.
Unions began negotiating health-care coverage after World War II. It made it into their contracts, modeling third-party pay as employment based. The unemployed, nonunion workers, widows, orphans, and others were left to twist in the wind.
U.S. Healthcare Coverage
In 1946, the federal government dedicated money for hospitals, medical research, vaccines, the National Institutes of Health, and psychiatric services. Some coverage of hospital costs for seniors on Social Security came in 1958, a seismic shift from employment-based insurance. President Johnson signed into law Medicaid and Medicare in 1965, as part of his Great Society legislation.
According to the World Bank, US health-care spending rose from 5.9 percent of GDP in 1995 to 8.3 percent in 2014. This is a higher rate than European Union nations spend (7.8 percent of GDP). The average of all high-income countries is 7.7 percent; the UK is 7.6 percent. Israel, with touted national health insurance coverage for all its citizens, spends 4.8 percent of GDP. But measuring national health-care costs is not enough. Out-of-pocket expenses are important to the individual.
Feeling the Pain of Healthcare Costs
Dragooning more citizens into Obamacare is costly. Premiums in the United States are rising annually in double digits. According to The Wall Street Journal (April 10, 2016), 23 percent of Americans are underinsured. High deductibles and co-pays force them to postpone tests, treatments, and prescriptions.