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Why the United States Has No National Health Insurance: Stakeholder Mobilization against the Welfare State, 1945-1996 Author(s): Jill Quadagno Source: Journal of Health and Social Behavior , 2004, Vol. 45, Extra Issue: Health and Health Care in the United States: Origins and Dynamics (2004), pp. 25-44 Published by: American Sociological Association Stable URL: http://www.jstor.com/stable/3653822 JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org. Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at https://about.jstor.org/terms American Sociological Association and Sage Publications, Inc. are collaborating with JSTOR to digitize, preserve and extend access to Journal of Health and Social Behavior This content downloaded from 137.110.42.201 on Wed, 22 Jul 2020 03:18:47 UTC All use subject to https://about.jstor.org/terms Why the United States Has No National Health Insurance: Stakeholder Mobilization Against the Welfare State, 1945-1996* JILL QUADAGNO Florida State University Journal of Health and Social Behavior 2004, Vol 45 (Extra Issue): 25-44 The United States is the only western industrialized nation that fails to provide universal coverage and the only nation where health care for the majority of the population is financed by for-profit, minimally regulated private insurance companies. These arrangements leave one-sixth of the population uninsured at any given time, and they leave others at risk of losing insurance as a result of normal life course events. Political theorists of the welfare state usually attribute the failure of national health insurance in the United States to broad- er forces of American political development, but they ignore the distinctive character of the health care financing arrangements that do exist. Medical sociologists emphasize the way that physicians parlayed their professional expertise into legal, institutional, and economic power but not the way this power was asserted in the political arena. This paper proposes a theory of stakeholder mobilization as the primary obstacle to national health insurance. The evidence supports the argument that powerful stakeholder groups, first the American Medical Association, then organizations of insurance companies and employer groups, have been able to defeat every effort to enact national health insurance across an entire century because they had superior resources and an organizational structure that closely mirrored the federated arrangements of the American state. The exception occurred when the AFL-CIO, with its national leadership, state federations and union locals, mobilized on behalfofMedicare. The right to health care is recognized in bility-guarantee comprehensive coverage of international law and guaranteed in the constiprimary, secondary, and tertiary services. To tutions of many nations (Jost 2003). With thethe extent that care is rationed, it is done on the sole exception of the United States, all indusbasis of clinical need, not ability to pay. (Keen, trialized countries-regardless of howLight, they and May 2001; Dixon and Mossialos raise funds, organize care or determine 2002). eligi- Universal health care has proven to be a major tool for restraining cost increases. Planning avoids widespread duplication that * I thank Donald Light, Debra Street, Larry Isaac, Lawrence Jacobs, Taeku Lee, Joane Nagel, Julian Zelizer, Ivy Bourgeault, John Manley, and John underlies the high percentage of empty beds in the United States; high rates of unnecessary procedures, tests and drugs; and ineffective use Myles for their helpful comments on an earlier ver- sion of the paper and I thank Michael Stewart, tance in locating archival documents and historical of some technologies. Although many nations have flirted with competition, most are wary Investigator Award in Health Policy Research from United States has consistently been least suc- Jennifer Reid Keene and Lori Parham for their assis- records. This project was supported by an because the most competitive system, the The Robert Wood Johnson Foundation The views cessful in controlling costs (Anderson et al 2003). expressed are those of the author and do not imply endorsement by The Robert Wood Johnson Foundation. Address correspondence to: Pepper Most countries allow, and some encourage, private insurance as an upgrade or second tier Institute on Aging and Public Policy, Florida State University, Tallahassee, FL 32306 to a higher class of service and a fuller array of 25 This content downloaded from 137.110.42.201 on Wed, 22 Jul 2020 03:18:47 UTC All use subject to https://about.jstor.org/terms 26 JOURNAL OF HEALTH AND SOCIAL BEHAVIOR United States has been slow services (Keen, Light, other andnations, Maythe 2001; Ruggie 1996). However, the practices to develop of national these social programs compaand why nies are heavily regulatedprograms to prevent them from that were enacted have been less engaging in the more pernicious forms of risk generous. rating. That is not the case in the United States, where private insurance companies are allowed Antistatist Values to use sophisticated forms of medical "under- writing" to set premiums and skim off the to oneand answer,individuthe central impedmore desirable employee According groups iment hasStates been an encompassing als (Light 1992). The United is the political onlyculture based on a master assumption "that the nation that fails to guarantee coverage of medpower of the state must be limited" to (Hartz ical services, rations extensively by ability 1955:62; Lipset 1996). Because the state is pay, and allows the private insurance industry with government, liberty syswith limto serve as a gatekeeper equated to the healthand care ited government, is easy to regard the weltem (Light 1994; Jost 2003). This "it arrangement fare state as a of threat to liberty" (Marmor, leaves approximately one-sixth the populaMashaw, time, and Harveyand 1990:5).it The leaves converse is tion uninsured at any given true: a distrust of provision others at risk of losing also insurance asgovernment a result of of social welfare confers upon thewidmarket and such life course events as divorce, aging, voluntary efforts(Harrington "a central role in social proowhood, or economic downturn vision"The (O'Connor, Orloff, and Shaver Meyer and Pavalko 1996). uninsured are sicker, receive inferior care, are of more like1999:44).and Examples the values thesis abound. Thus, Jacobs (1993) contends that ly to die prematurely (Institute of Medicine "enduring public ambivalence toward governThe lack of national health insurance in the ment ... is the underlying source of America's United States is the prime example of a larger impasse" over health care reform (p. 630). 2004). historic issue captured by the phrase Similarly, Marmor (2000) argues that, "no "American exceptionalism." The question to be matter how large the public subsidies and how answered is not just why every proposal for substantial the public interest in the distribunational health insurance has failed but also tion, financing, and quality of services dominated by private sector actors, the American how commercial enterprise became the preferred alternative. Neither political socioloimpulse is to disperse authority, finance and gists nor medical sociologists have fully control" (p. 101). explained this puzzling pattern. Political theo- Despite its prominence in political theory, rists of the welfare state usually attribute the the values argument raises some problematic failure of national health insurance in the United States to broader forces of American issues. Notably, it cannot explain why some programs that appear to contradict these purpolitical development but ignore the distinctive portedly core values (i.e., Social Security and Medicare) have been enacted or what mechacharacter of the health care financing arrangements that do exist. Medical sociologists nisms link antistatist values to policy outcomes emphasize the way that physicians parlayed (Steinmo and Watts 1995). Values are simply their professional expertise into legal, institu-presumed to have some kind of unexplained tional, and economic power but not the way effect on the policymaking process. As this power was asserted in the political arena.Skocpol (1992) notes, "Many scholars who What is required is a theory that can locate the talk about national values are vague about the political determinants of health reform within processes through which they influence polithe changing context of the transformation of cymaking" (p. 16). American medicine. Weak Labor/Power Resources POLITICAL THEORIES OF THE WELFARE STATE A second argument attributes the failure of national health insurance in the United States For political theorists of the welfare to state, the lack of a working class movement and the central question has been why, compared to labor-based political party (Navarro 1989). This content downloaded from 137.110.42.201 on Wed, 22 Jul 2020 03:18:47 UTC All use subject to https://about.jstor.org/terms WHY THE UNITED STATES HAS NO NATIONAL HEALTH INSURANCE 27 This thesis is derived from "power each resource" with its own independent authority, responsibilities, theory, which views the welfare state in and bases of support. Within the legislature, Western, capitalist democracies as a product of power is further divided the House and the Senate as well as trade union mobilization (Korpi between 1989; Hicks numerous committees and subcommittees 1999; Esping-Andersen 1990). According to "power resource" theorists, markets andlegislative poliwhere measures can be delayed or tics are alternative arenas for the mobilization of resources and the distribution of rewards. In blocked. Further, because candidates for office largely depend on raising campaign resources the market, "capital and economic resources personally, they are vulnerable to appeals by form the basis of power," and private econom- interest groups and lobbying organizations ic interests dominate, while in the political (Lipset 1996). Decentralization thus impedes arena, wage earners have a numerical advan- policy innovation by increasing the number of tage, which they can use to "modify the play of "veto" points (i.e., the courts, the legislative market forces" (Korpi 1989:312-13). In the process, the states) where opponents can block ideal typical case, workers organize into trade policy reform and by allowing special interests unions, form a labor-based political party, and greater access (Maioni 1998). then use their "power resources" to expand the System-level variables such as "state strucwelfare state (Hicks 1999). tures" may appear adequate in explaining Although power resource theorists aptly cross-national variations in policy outcomes, capture the political processes involved when but they are inadequate when applied to histor- labor unions mobilize politically, engage in ical variations in policy outcome within the distributory conflicts, and establish claims for United States. A structural argument cannot processing benefits independent of market cri- explain why Congress enacted (then repealed) teria, they are less successful in theorizing the the Medicare Catastrophic Coverage Act of political processes involved when the market 1988 but rejected a national long term care remains the locus of distribution (Esping- program that same year. Although the Andersen 1990). Presumably, when unions fail American political system with its checks and to mobilize politically, then the state will balances is designed to slow down the policyencourage the market and voluntary efforts for making process and prevent major and abrupt social provision. Left unspecified is whether shifts, that argument provides little insight into private economic interests organize as active how the existing configuration of public and agents in market preservation or merely serve private health benefits came to be. Recognizing the weakness of "state strucas passive observers of the status quo. The uniquely American system of health care ture" arguments, a second generation of instifinancing involves social legislation that defers tutional theorists has devised an alternative to market principles and federal sponsorship of approach that emphasizes the effect of early private sector alternatives to public programs. policy choices on subsequent policy options, a This structure raises compelling theoretical process captured by the phrase "path depenissues regarding the effect of organized labor dency." The central premise of "path depenon the financing arrangements that emerged in dent" theories is that policies are not only a key periods and the influence exerted by busi- product of politics but also produce their own ness groups on both public and private health politics by giving rise to widespread public expectations and vast networks of vested interinsurance programs. ests (Pierson 1994, 2002). Early policy choices narrow the menu of future options by driPolitical Institutions and Policy Legacies ving policy down self-reinforcing paths that become increasingly difficult to alter. Thus, A third argument emphasizes the distinctive according to Hacker (1998, 2002), Social characteristics of American political institu- Security succeeded while national health tions. According to one variant of institutional insurance failed because of differences in timtheory, the main impediment to health care ing and sequencing. Social Security was creatreform in the United States is the diffusion of ed before a private pension system developed political authority (Steinmo and Watts 1995; and by implication before a network of interHacker 1998). At the national level, power is ests could arise to impede its enactment. By divided among three branches of government, contrast, the private health insurance system This content downloaded from 137.110.42.201 on Wed, 22 Jul 2020 03:18:47 UTC All use subject to https://about.jstor.org/terms 28 JOURNAL OF HEALTH AND SOCIAL BEHAVIOR and the the rejection of any policy or plan th was solidly entrenched by time reformers failed to respect their professional sovereignt began to press for a government solution, (Starralternative. 1982a). "crowding out" the public The notion of path dependent social policy Although medical sociologists have aptly characterized the devices physicians employed is useful in that it highlights the importance of to construct and preserve their professional tracing the configuration of interests that theyinnovation do not specify how conflicts develop in response to asovereignty, policy and over health policy were translated into actual thus to account for the long term consequences of alternative choices. political However, it officials. does not decisions by elected Further, explain why one path was whilechosen they recognize over that theanother. enactment of Medicare and Medicaid in 1965 represented a turning point that unleashed these "counterTHE HEALTH CARE SYSTEM AND vailing powers," they do not theorize the polit- POLITICAL POWER ical consequences of this transformation (Chernew 2001; Light 1995, 2000; Havighurst The Theory of Countervailing Powers 2002). Thus, for example, McAdam and Scott (2002) note that following many failed While the "American exceptionalism" theo-"legislation was successfully passed attempts, ries each capture distinctive elementsinof poli1965 to provide governmental financing for cymaking dynamics in the United States, none health care services for the elderly and the provides a comprehensive framework for indigent" (p. 25). However, their only explanaunderstanding how the public/privatetion mix of these programs succeeded in overof how health care financing arrangements was creatcoming resistance from physicians is the weak assertion that, in addition to the election of a ed. That has been the project of medical sociologists who have addressed the issue more from a liberal Congress, "the framing of the different theoretical paradigm. In medical issues sociwas also of great importance" (p. 25). ology the key debates have focused on the way that physicians were able to parlay their proA THEORY OF STAKEHOLDER fessional expertise into social privilege, ecoMOBILIZATION nomic power and political influence; suppress all challenges to their authority; and prevent outsiders from dictating the conditions ofThis med-paper constructs an alternative mode ical practice. Their ability to do so required that considers both the broader political oppo them to gain control over the market for their tunity structure and the character of the heal services and the various organizations carethat system. The theory of stakeholder mo governed medical practice, financing, and pol- suggests that the health care financi lization icy. Physicians established professional system sover-in the United States was constructe eignty and relegated any countervailing power contentious struggles between refor through to the margins of medical care through ersfive and powerful stakeholder groups wh major structural changes. The first mobilized was the politically against national heal emergence of an informal system of insurance social or any government programs tha control in medical practice based on physimight compete with private sector products cians' needs for referrals and hospitallead privito government regulation of the mark Stakeholder leges. The second was the control of the labor mobilization involves the same market through various mechanisms toprocesses restrict that social movement theorists ususupply, blocking the construction of new ally medassociate with the mobilization of politiical schools and restricting the number of stucally powerless groups (Jenkins and Perrow dents admitted. The third was the expulsion of be effective in the political arena, 1977). To profit-making enterprises that could stakeholders extract share with the politically powersurplus labor from physicians. The fourth less a was need for leadership, an administrative structure, incentives, some mechanisms for the exclusion of any organized purchasers- the state, corporations or voluntary associagarnering resources and marshalling support, tions-that could offset the market power and a of setting (whether it be a workplace or a physicians. Finally, the fifth change was the neighbourhood) where grassroots activity can establishment of specific spheres of authority be organized (McAdam, McCarthy, and Zald This content downloaded from 137.110.42.201 on Wed, 22 Jul 2020 03:18:47 UTC All use subject to https://about.jstor.org/terms WHY THE UNITED STATES HAS NO NATIONAL HEALTH INSURANCE 29 ment intervention and took the form of billion 1996). Even though dominant groups may dollar, managed care firms. have privileged and systematic access to for-profit politics and to elected representatives, Managed they require care helped to dismantle physicians' these same resources to exert political cultural influauthority by undermining their claims ence. Stakeholder mobilization also involved the of specialized knowledge, putting them at financial risk for their medical decisions, and use of cultural "schemas" to shape public perplacing decision-making power in the hands of ceptions of the issues, strategically framenon-physicians (Luft 1999). The arousal of ideas, and establish shared meanings (Sewell corporations and insurance companies also 1996; Young 2002). Implicit in this emphasis had consequences for national health insurance. Their political mobilization brought on symbolic politics is a rejection of the notion that political decisions are made on the basis of powerful stakeholders into debates about objective information and a recognition health care reform. While corporations were instead that political enemies, threats, crises, primarily concerned with containing costs, and problems are social constructions that creinsurers had a vested interest in preventing the ate solidarity between groups and individualsfederal government from creating competing and ultimately determine whose framing of an products and in structuring any new programs issue is authoritative (Edelman 1988; Kane in ways that would preserve the private market. 1997; Pedriana and Stryker 1997). How issues are defined can activate new groups to take an THE DEFENSE OF PHYSICIAN interest in the policy, fragment the existing configuration of support and limit potentialSOVEREIGNTY options for change. As West and Loomis (1999) assert, the ability to define the alterna- The greatest challenge to physicians' auton omy came from third party financiers of med tives is the supreme instrument of power. From the New Deal of the 1930s to the ical care. Should third parties assume respon 1970s, the chief obstacle to national health sibility for financing care, they would need t establish some way to control their financia insurance was organized medicine. However, physicians succeeded because their political liability. Controlling costs would invariabl objectives meshed with those of other powerful mean regulating physicians' fees and interven groups, notably employers, insurance compaing in the conditions of medical practice nies, and trade unions. Physicians alsoDuring had the Progressive Era, physicians fough political allies in Congress among Republican against a proposal for a state health insuranc opponents of the New Deal welfare state plan and (Hoffman 2001). In the 1930s physicians among southern Democrats who controlled the waged a fierce campaign to prevent feder key committees through which all social officials welfrom including national health insur fare legislation had to pass and who refused to in the Social Security Act. As a result, th ance support any program that might allow federal largest expansion of federal authority into th authorities to intervene in the South's racially social welfare system in American history, th Social Security Act of 1935, did not includ segregated health care system (Quadagno national health insurance (Katz 2001). 2004). Across two-thirds of a century, physicians and their allies lobbied legislators, cultiAlthough physicians initially resisted any vated sympathetic candidates through sort largeof third party financing at all, the Grea campaign contributions, organized petition Depression had brought hospitals to the brin drives, created grassroots protests, and develof financial ruin. Searching for some way to oped new "products" whenever government stabilize hospital income without allowin action seemed imminent (Gordon 2003). external controls to be imposed, the American Then the excesses of the profession Hospital proAssociation (AHA) created Blu duced a counter-reaction from the government, Cross, a prepayment system of insuranc corporations, and insurance companies against that the costs of a hospital stay (Law 1976) were activated to challenge the protected Under Blue Cross plans subscribers would pre provider markets (Light 1995). Ironically,pay thea small monthly fee in exchange for fre most effective challenge came from the private hospital care when needed. Hospitals would b health insurance system that physicians paid had for whatever services they provided helped to construct as an alternative to governwhatever price they charged. The fledglin This content downloaded from 137.110.42.201 on Wed, 22 Jul 2020 03:18:47 UTC All use subject to https://about.jstor.org/terms 30 JOURNAL OF HEALTH AND SOCIAL BEHAVIOR commercial insurance industry, teamed up withtoo, some powerful provided employer and hospital benefits on an "indemnity" basis insurer groups: Blue Cross, the American (meaning that patients were Hospital Association, reimbursed the Insurance forEconomic some of the costs after the fact), imposing no Society (an organization representing over controls whatsoever on 2,000 doctors orcompanies), hospitals. insurance pharmaceutical Thus, the insurance industry became the serand drug manufacturers, and the Chamber of vant of the providers ofCommerce health a passive all care, took a public position opposing vehicle for the transmission of funds from national health insurance and endorsing pripatients to providers but exerting no oversight vate health insurance.5 The AMA also actively (Light 1997). entered electoral politics, organizing against National health insurance was revived in Democratic candidates who supported nation1945 under President Harry Truman (Poen al health insurance. In Pennsylvania, just three 1979). As the Truman administration geared weeks before the 1950 election, physicians up to promote national health insurance, the created a "Healing Arts" committee composed American Medical Association (AMA) of doctors, nurses, dentists, and office assistants who mailed over 190,000 letters, ran launched a "National Education Campaign" to prevent its passage and to promote private newspaper ads, hung more than 500 posters in health insurance. The AMA was perfectly doctors' offices, and posted notices in waiting organized to conduct an opposition campaign. rooms. Physicians also sent personal letters to The basic unit of the AMA was the county their patients, explaining that there were "evil medical society. Without membership in the forces creeping into this country" county society, a doctor could not be a member (Cunningham 1951:53-54) and asking them to of a state medical society or be granted staff vote for Republican candidates. On election privileges at most hospitals. At the next level day, spot radio announcements were made was the state medical society, which sent deleevery hour on the hour. In 1950 Wisconsin doctors started a gates to the AMA's National House of Delegates, its conservative governing body. "Physicians for Freedom" campaign to defeat With its hierarchical organizational structure, Representative Andrew Biemiller (D-WI), the AMA had the capacity to set an agenda, House sponsor of a national health insurance generate resources, and mobilize a grassrootsbill, and Utah doctors mustered forces against campaign in nearly every state, city, and small Biemiller's Senate co-sponsor, Elbert Thomas town in America. (D-UT). Florida physicians also worked to AMA national headquarters levied a $25 fee defeat Senator Claude Pepper (D-FL), another on all members and told state societies to adopt co-sponsor. A prominent Florida urologis a resolution against "socialized medicine." wrote his colleagues asking for money an Every county society was organized "into a endorsing Pepper's opponent, George hard-driving campaign organization" with bat- Smathers: tle orders going out by "letter, telegraph and We physicians in Florida have a terrific telephone." Each state organization received form speeches from headquarters to "get lay- men for medicine in this fight" and were instructed to approach local newspapers to get the "real facts" before the editors.' Posters, pamphlets, leaflets, form resolutions, speeches, cartoons, and publicity materials that could be adopted for state use all had a single goal: fight on our hands to defeat Senator Claude Pepper, the outstanding advocate of 'socialized medicine' and the 'welfare state' in America. In eliminating Pepper from Congress, the first great battle against Socialism in American will have been won.6 Physicians also ran half page ads of a photo "to keep public opinion hostile to national showing Senator Pepper with the African health insurance."2 The message to be promot- American singer, Paul Robeson, who was a ed in every venue evoked the same antistatist member of the Communist party.7 Racism and the Red Scare provided a potent socialized medicine, part of a Communist framework plot for defaming national health insurto destroy freedom.3 Patients would surrender ance and demonizing its proponents. In 1945, liberty and receive in return "low-grade assem75 percent of Americans supported national bly line medicine."4 health insurance; by 1949 that figure had To achieve its political objective, the AMA declined to only 21 percent.8 In the 1950 elec- theme-that national health insurance was This content downloaded from 137.110.42.201 on Wed, 22 Jul 2020 03:18:47 UTC All use subject to https://about.jstor.org/terms WHY THE UNITED STATES HAS NO NATIONAL HEALTH INSURANCE 31 lion had were supprivately insured (U.S. Senate tions six Democratic Senators who ported national health insurance were 1951:2).defeatThe increase in private coverage was ed. a product of wartime wage and price controls According to some interpretations, the and tax policies that encouraged the proliferaAMA campaign against national health insurtion of fringe benefits and became organized ance was ineffectual. Thus, Morone (1990) claims that the AMA "tirelessly evoked the twin specters of galloping socialism . . . and Kafkaesque bureaucracies (but) ... the rhetorical pyrotechnics did not matter" (p. 262). In his view, reform depended on "political will in labor's primary strategy for recruiting and retaining members in a hostile political climate. PRIVATIZING ORGANIZED LABOR'S Congress and the Presidency" (p. 262). AGENDA However, the evidence indicates that "political will" is not determined independent of these campaigns. During the 1940s the AMA shaped trial democracies suggests that organized labor The activities of trade unions in other indus- the "political will" in several ways. First, it is the prime political constituency with the mobilized economic resources and drew upon its organizational capacity to arouse members, stimulate grassroots activities and reach deep motivation and capacity to promote a national health insurance program. Consequently, one would not expect the trade unions to be advocates of a private insurance system. Yet in the into communities to foment opposition to national health insurance. Second, the AMA United States, for the most part the trade succeeded in framing national health insurance as a Communist plot and its supporters as communists. Third, the AMA organized other antiwelfare state groups into a coalition to spread unions made no effort to win national health its oppositional message across a range of ment contracts (Derickson 1994). As Stevens insurance through political means but instead focused on obtaining collectively bargained fringe benefits for their members in employ- (1988) notes, "the political pressure exerted by American labor movement was . . . a How did physicians, merely a the professional demand forpowa private alternative to state-run group, defeat the will of social reformers, erful politicians, and even presidents welfarefor programs" more (p. 125). reason why the trade unions chose to than half a century? Starr (1982) The argues that the key to physicians' political influence was benefits must be understood bargain for fringe venues. as a response to an assault by business and "the absence of [any] countervailing power" (p. 231), but the historical evidence conservative suggests forces that sought to sharply curb that the opposite is the case. It was not the organized labor's ambitions in the postwar era absence of a countervailing power allowed andthat reduce its economic program to a militant physicians to assert their parochial concerns politics. The clash between interest-group and labor culminated in 1947 with into the policy making process, business but rather the fact that their objectives coincided with those passage of the Taft-Hartley Act, which rescindof employer groups, insurance companies, and ed many of the rights unions had won during trade unions (Quadagno 2004).the Once 1930s (Lichtenstein these 1989). In the wake of interests diverged, the fragilityTaft-Hartley, of physicians' the Congress of Industrial power base was revealed. Organizations (CIO) expelled 11 communistTruman did not run for re-election in 1952 controlled unions, triggering internecine warand the Republican candidate, Dwight fare among several large unions. Union feuds Eisenhower, campaigned against national also helped defeat Operation Dixie, the CIO's health insurance. Under eight subsequent years organizing drive in the South (Griffith 1988). of Republican rule, national health insurance The purge of communist unions from the CIO disappeared from the political agenda. The dramatically narrowed the scope of political policy vacuum gave the private health insur- debate within the labor movement (Stepanance industry the opportunity to establish a Norris and Zeitlin 1995; Stepan-Norris and preeminent position as the financier of health Zeitlin 2002). To surmount new obstacles to recruitment care. In 1940 fewer than six million people had any kind of insurance against the costs of med- invoked under Taft-Hartley, the trade unions ical care. Just ten years later more than 75 mil- made bargaining for fringe benefits a top pri- This content downloaded from 137.110.42.201 on Wed, 22 Jul 2020 03:18:47 UTC All use subject to https://about.jstor.org/terms 32 JOURNAL OF HEALTH AND SOCIAL BEHAVIOR from onebenefits visit to the doctor to the next."10 ority. Collectively-bargained obtained Rather the vast majority were in good health. equivalent of a closed shop," that is, a unionOnly 4 percent of people 65 or older were conized workplace (Brown 1997-1998:653).fined because of chronic illness. Nor were the on union terms were viewed as the "virtual Although pensions involved more money, aged especially needy. When tax obligations health insurance was the benefit for which and family size were taken into account, aged unions bargained most actively. As a result,families had only slightly less income than between 1946 and 1957 the number of workers younger families. Moreover, they had fewer covered by collectively bargained health insur-financial obligations. Despite employing ance agreements rose from one million to 12 "every propaganda tactic it had learned from million, plus an additional 20 million depen- the bitter battles of the Truman era," ' AMA dents (Klein 2003). Thus, during a time when efforts were neutralized by the AFL-CIO trade unions in other nations were working for(Marmor 2000:38). national health insurance, American trade Notably, the AFL-CIO not only had an orgaunions faced an effective employer assault andnizational structure that matched that of the a hostile political environment. The conflictAMA, with its national headquarters, state fedremoved the organized working class from theerations, and union locals, but it also employed struggle over a universal health care program,a similar repertoire of tactics, strategies, and diverting its resources and political energygrassroots mobilization. This similarity is toward the pursuit of private health benefits forstriking given that the AFL-CIO represented union members (Gottschalk 2000). the working class as a whole, both skilled and Collectively bargained health insurance unskilled workers, while the AMA was a nar- plans had one significant gap: They generally rowly-focused organization with its primary excluded retirees. Whenever a union attemptedgoal protecting the professional prerogatives of to include health insurance for retirees in a col- physicians. The comparison of the activities of lective bargaining agreement, that drove up the AMA and the AFL-CIO suggests a more costs and resulted in concessions on wages andgeneral principle of policymaking processes in other issues.9 Thus, organized labor had anthe United States-that the structure of the incentive to support a public health insurancestate channels political activity in certain program for the aged. Health insurance for olddirections, regardless of what type of group, people appeared to be an achievable politicalchallenger or stakeholder, organizes that objective, one that could resolve the problem activity. of negotiating retiree health benefits and prove When it appeared that a government soluwhat a recently united labor movement couldtion was gaining political support, commercial achieve (Berkowitz 1986). insurers, who had previously been uninterested Beginning in 1956 the AFL-CIO wrotein insuring the elderly, began offering policies model bills and drummed up legislative spon-tailored to older people. In 1957 Continental sors, held annual conferences to educate unionCasualty created Golden 65, the first hospital members about the issues, and worked to insurance program for the aged. The following develop a broad base of political support. Toyear, in 1958, Mutual of Omaha developed a win over the public, the AFL-CIO created aSenior Security program. Most commercial separate "grassroots" organization of retired policies were woefully inadequate, however, trade unionists, the National Council of Seniorleaving the elderly with many health needs Citizens (NCSC). The NCSC staged demon- uncovered and many expenses to absorb. Fewer strations, organized mass protests and rallies,than half of people over 65 purchased health prepared flyers and newsletters, and bombard-insurance, and many who did either dropped ed elected officials with letters and phonetheir policies when rates rose or were dropped calls. The AFL-CIO also seized the initiative in by the insurer when claims were made (U.S. defining Medicare, using publicity materials toSenate 1964). As it became apparent that characterize the aged as a deserving group insuring the aged would never be profitable, insurance companies stopped actively oppos(Quadagno forthcoming). Hoping to regain control of the nationaling Medicare and instead lobbied behind the debate, the AMA released its own statistics,scenes to carve out a role they could play contending that the aged were not "universally(Corning 1969). frail and feeble, constantly ill, and doddering At the 1964 Democratic national convention This content downloaded from 137.110.42.201 on Wed, 2fff on Thu, 01 Jan 1976 12:34:56 UTC All use subject to https://about.jstor.org/terms WHY THE UNITED STATES HAS NO NATIONAL HEALTH INSURANCE 33 in Atlantic City, NCSC members arrived by the The fight to resurrect national health insurance began in 1968 when Walter Reuther, presmarched for 10 blocks down the boardwalk to ident of the United Auto Workers (UAW), busload. Fourteen thousand senior citizens the convention hotel. Then during the months made a fiery speech before the American leading up to the election, the NCSC worked toPublic Health Association. Reuther charged ensure that no Medicare supporters were that the only way to remove economic barriers defeated at the polls. The Democrats won the to care and contain health care costs was Senate and the House by a wide margin, and through a single federal program (Reuther no incumbent, Republican or Democrat, who 1969). What triggered the apparent about-face supported Medicare lost (Zelizer 1998). of organized labor was the dilemma of rising Medicare was signed into law by President health insurance premiums, which were taking Lyndon Johnson on July 30, 1965. The a larger share of the total wage package with Medicare bill included "Part A," which provid- each new contract."1 Reuther organized the ed insurance for hospital care, "Part B," anCommittee of 100 for National Health optional voluntary plan of health insurance for Insurance (CNHI), a top-notch team of trad physicians' services. Also included was unionists and social activists, including Medicaid, a new joint federal-state program ofSenator Ted Kennedy, the heir apparent of the health insurance for the poor. Democratic party, who introduced the CNHI ORGANIZED LABOR'S REVERSAL plan, dubbed Health Security, in 1971. Modeled after Medicare, Health Security would make the federal government the "sin- gle payer" for all health services. Not to be Medicare was a victory for reformers outdone, but President Richard Nixon announced also a victory for providers and insurers. The his own National Health Insurance Partnership American Medical Association and the Act a few months later. A regulatory approach American Hospital Association won that concesencouraged the private insurance market, sions guaranteeing that the government wouldplan included an employer mandate, a Nixon's not control doctors' fees or hospital charges concept that had gained favor with some large and that federal authorities would not adminisemployers, and health maintenance organizater Medicare directly. Rather, private insurance tions, now known widely as simply HMOs agencies would handle claims, review billed (Starr 1982b). costs and reimburse providers (JacobsAfter 1993;its bitter defeat over Medicare, the Fein 1985). Medicare also left a considerable AMA had decided that it was better to help number of health care needs uncovered, ensurcraft a bill friendly to the profession than to ing that private insurers retained a share of thereform. Instead of launching a cam scuttle market for "Medigap" policies while shifting paign against Health Security, the AMA the riskier, less predictable costs to theunveiled govern- Medicredit, an alternative based on ment. vouchers and tax credits. However, the AHA With the federal government pouring virturefused to endorse Medicredit, preferring to ally unlimited public resources into financing expand Medicare into a national program, and care for the aged and the poor, health care the insurance industry opposed Medicredit became a profitable enterprise for physicians,fearing that any infusion of federal funds into hospitals, and insurance companies. In 1965 the industry, even in the form of a subsidy, alone hospital daily charges jumped 16.5 per-would invite federal regulation.12 cent, average fees for office visits to general By July of 1971, 22 different bills were on the table. At one end of the continuum was the practitioners jumped 25 percent, and fees for internists jumped 40 percent (Marmor 2000).AMA's Medicredit; at the other was Kennedy' Spiralling costs provided fuel for reformerssingle payer plan. However, national health who argued that the problem could only be insurance failed to win congressional support solved by entirely revamping the health carein 1972, because of the Vietnam war, the system and placing responsibility in the hands OPEC oil crisis and the absence ofa grassroots of one purchaser, the federal government. movement supporting the legislation. Although However, cost increases also made the reformthe AFL-CIO endorsed Health Security, the ers' task more complex by diminishing the endorsement was qualified by an emphasis on costs.13 Even the UAW, in disarray since clarity of the message. This content downloaded from 137.110.42.201 on Wed, 22 Jul 2020 03:18:47 UTC All use subject to https://about.jstor.org/terms 34 JOURNAL OF HEALTH AND SOCIAL BEHAVIOR Reuther had withdrawn the union from the cial interests. AMA lobbyists sat in on the AFL-CIO in an internecine struggle in 1967, Committee's final meeting and mustered 12 votes for an alternative plan, similar to failed to provide a firm base of support (Goldfield 2000). In 1973, a weakened versionMedicredit (Wainess 1999). Insurance industry of Nixon's HMO proposal was enacted insteadlobbyist also opposed several aspects of the (Hacker 2002; Gordon 2003). measure, while labor leaders refused to sup- In his 1974 State of the Union address, port any compromise plan (Wolinsky and Brune 1994). With few politicians receiving ance program, a two part plan which wouldmail on the issue from constituents, Mills Nixon announced a new national health insur- give the private insurance industry a central announced that national health insurance role, as a way to distract attention from the would be tabled and that the Committee would escalating Watergate scandal and head off anot resume consideration in the fall (Quadagno more ambitious Kennedy proposal.14 On April2005). 2, 1974, with much fanfare, Kennedy As health insurance costs continued to rise announced his own plan that he devised with inexorably during the 1980s, large corpora- Ways and Means Committee Chair Wilburtions began seeking other cost containment Mills (D-AK) without consultation with themeasures. One strategy was to bypass insurtrade unions. Like the earlier Health Security ance companies completely and self-insure plan, the Kennedy-Mills legislation would (Gabel et al. 1987). Self-insurance was a stratreplace the current system with a single egy that allowed corporations to reduce the national health insurance program but would administrative costs of insurance companies, otherwise preserve most aspects of the tradi-negotiate better rates with hospitals and physitional health economy. It would include co-cians, and use surplus funds in health benefit payments and deductibles, allow private insur-accounts as a source of investment capital. In ers to serve as fiscal intermediaries, and leave1975 only 5 percent of employees were covroom for lucrative supplementary benefits.ered by self-insured plans; by 1985 that figure Not unexpectedly, the AMA decried thehad increased to 42 percent (Weiss 1993). The "socialist" measure (Dranove 2000: 30). Thetrend toward self-insurance eroded the ecoNational Federation of Independent Businessnomic base of private insurance plans and left called it "nothing more than a first step them with the less profitable business of protowards socialized medicine" (Martin cessing claims and benefits management 1993:369). (Goldsmith 1984). To compensate for these The AFL-CIO, furious at being excluded losses, insurance companies began aggressive- from the process, deserted Kennedy, denouncing Kennedy-Mills as a surrender of organized labor's fundamental principles. The unions objected to the major role allotted to the health insurance industry and to the co-payments and ly seeking new markets (Bodenheimer 1990). They began marketing managed care plans to employers that entangled them in complex nized labor because of the heavy burden they negotiations with providers through preferred provider networks, health maintenance organizations, and prepaid products. They also began exploring the untapped, potentially lucrative income families (Quadagno forthcoming). Kitchener and Harrington (2004) show in this deductibles, which were anathema to orga- would place on low-income and middle- AFL-CIO leaders told their members to press their elected representatives to delay voting on national health insurance until the following year, when it was presumed a veto-proof Congress would be in office and a more laborfriendly plan could be enacted. When Nixon was forced to resign on August long-term care market, which had, as volume, concentrated on nursing home care rather than alternative arrangements because of medical and business opposition. Long-term care was an attractive product line for insurers, because profits in the commercial insurance industry are generated almost entirely from investment income. Policies that incur benefit 9, 1974, his successor, Vice President Gerald Ford, singled out national health insurance as are less profitable than policies that likely Congress should pass that year. The House won't pay out benefits for years, such as life insurance or long-term care insurance (Gabel the major piece of domestic legislation expenses monthly, such as health insurance, Ways and Means Committee became an instant and Monheit 1983; Schwartz 1999). The target for lobbyists and contributions from spe- longer the duration of the policy, the greater This content downloaded from 137.110.42.201 on Wed, 22 Jul 2020 03:18:47 UTC All use subject to https://about.jstor.org/terms WHY THE UNITED STATES HAS NO NATIONAL HEALTH INSURANCE 35 the profits. Yet it appeared that theactive government employees and 54,000 retired employ- might absorb this promising market ees; by as 1987 a comit had only 37,000 active employ- ees to andexpand 70,000 retirees (Gottschalk 2000). promise with legislation intended Medicare to cover "catastrophic" expenses. Expanding Medicare to cover catastrophic health care costs could ease these pressures on THE TRIUMPH OF THE INSURANCE corporations and reduce employer's liability to current retirees by an estimated 30 percent (U.S. Senate 1989). The one influential organization opposed to The Long-term Care Defeat Medicare expansion was the Pharmaceutical Manufacturer's Association (PMA). The PMA In 1986 President Ronald Reagan proposed was an active participant in a conservative expanding Medicare to include the cost of to halt the growth of federal entitlemovement "catastrophic illness," purportedly to cultivate ment expenditures and immobilize the old age the support of the elderly whose health care which appeared to be a growing politilobby, costs in the form of deductibles, co-pays cal and force capable of swinging elections and medigap insurance now consumed a higher then demanding ever greater benefits (Pratt proportion of their income than before 1993; Powell, Williamson, and Branco 1996). Medicare was enacted (Moon 1993). He insistThe PMA opposed a provision in the cataed, however, that any proposal be voluntary, strophic care bill that would permit Medicare self-supporting, revenue neutral, and thattoitset not drug prices or stop paying for entire encroach on the private market (Thompson classes of drugs entirely if costs rose too 1990). A catastrophic care plan was sent to To prevent the inclusion of price conquickly. Congress in February of 1987 with the trols, the PMA spent several million dollars endorsement of the major provider groups. The against the legislation. The PMA also lobbying American Hospital Association supported the mobilized a grassroots movement among more measure as long as reimbursement to hospitals than 12,000 pharmacists, who wrote letters was sufficient. The American Medical urging their representatives to support a Association supported it as long as fee-for-serwatered-down version of the drug benefit vice was not challenged (Street 1993). The 2005). (Quadagno insurance industry did not oppose the OncataJuly 1, 1988 Congress enacted the strophic care proposal because it would stillCatastrophic Coverage Act with Medicare leave numerous gaps in coverage, including huge bipartisan majorities in both the House INDUSTRY and Senate. The PMA endorsed the final com$2,000 a year for deductibles and co-payments and treatment for Alzheimer's disease, which promise bill, which made no reference to cost was an emerging market for the private induscontrols on drugs. The Medicare Catastrophic try (Himelfarb 1995). Further, according Coverageto Act capped the amount beneficiaries conservative columnist Peter Ferrara,would "insurhave to pay for hospital and physician ance companies weren't interested in care, fighting provided a prescription drug benefit, mammography screening, hospice care, and S. . Medigap just isn't that profitable" (Thompson 1990:199). caregiver support but did not provide any help Expanding Medicare to cover catastrophic for the most pressing expense of the elderly, expenses would be a boon to large long-term firms, care (Street 1993). The new benefits which had become increasingly concerned would be financed by an increase in Part B about the costs of retiree health benefits for premiums, which would rise from $122 a year former employees. Over 70 percent of people to $511. In addition, Medicare beneficiaries 65 and older had some supplemental medigap who paid at least $150 a year in income taxes insurance, and half of these policies were paid would have to pay a surcharge up to a maxifor by their former employers. By the 1980smum of $800 for a single person and $1,600 health care inflation coupled with increasing for a couple (Pratt 1993). Although approxilife expectancy and early retirement had mademately 60 percent of older people would be retiree health benefits a significant drain on exempt from the surcharge because their profit margins (Neilsen 1987). The moreincomes were too low, those who would have mature the firm, the higher the costs. Forto pay were the group most likely to already example, in 1982 Bethlehem Steel had 70,000 have catastrophic coverage from medigap This content downloaded from 137.110.42.201 on Wed, 22 Jul 2020 03:18:47 UTC All use subject to https://about.jstor.org/terms 36 JOURNAL OF HEALTH AND SOCIAL BEHAVIOR insurance policies. Thus, sion. they be paying Many would insurance companies paid agents a twice for the same coverage. commission of as much as 60 percent of first The Medicare Catastrophic year premiums, Coverage giving them an incentive Act to triggered an explosive "churn" reaction clients. Someamong elderly people the owned as elderly. Angry senior many citizens as 11 different descended policies that paid on duplicate the benefits (U.S. House of Representatives Congress, demanding that new program be 1989). changed or repealed outright (Himelfarb 1995). On October 4, 1989 Politically, the insurers House are consummate voted insid-to State insurance commissioners and their repeal the program it ers. had approved just 16 staff are often former insurance executives, months earlier. Two days later the Senate voted and the federalonly and state the committees that hanto repeal the surtax, retaining longterm hospital benefits, subsequently dle which insurance matters are dominated by legislawere also eliminated tors (Crystal Day with ties to the1990; industry (Bodenheimer 1993). 1990). With assets greater than the largest During the battle over catastrophic care, a long-term care measure was introduced by Representative Claude Pepper (D-FL). Pepper proposed expanding Medicare to pay for home care services, a popular proposal among the elderly whose only option when they needed long-term care was to become sufficiently impoverished to qualify for Medicaid (Grogan and Patashnik 2003). According to a poll conducted by the American Association of Retired Persons, 85 percent of the public supported home care for the disabled.15 In exchange for a promised vote on his home care bill in the industrial corporations and insurance lobbyists foremost in nearly every state, the insurance industry proved to be a formidable foe (Renzulli 2000). To fend off the threat of a federal home care program, the Health Insurance Association of America (HIAA) bankrolled a lobbying blitz. HIAA lobbyists wrote every member of Congress proclaiming that "this bill is the wrong medicine for our country, another example of an expensive government solution ... that would lead to exploding public sector costs."16 The HIAA also created an umbrella organization, the Coordinating Committee for Long-Term Care, to arouse House, Pepper agreed he would not bottle up the catastrophic care bill, which he viewed as inadequate, in the Rules Committee. The insurance industry was willing to allow the federal government to absorb the cost of catastrophic care, because the medigap market National Association of Manufacturers, and was saturated and never that profitable to begin several other insurer groups worked together to with. In fact, as soon as the Medicare other stakeholder organizations. Blue Cross/Blue Shield, the Chamber of Commerce, National Small Business United, the American Association of Homes for the Aged, the defeat the Pepper bill.17 The Chamber of Catastrophic Coverage Act was signed, insurCommerce, whose own governing committees ers began offering new policies to cover the were co- stacked with insurers, warned that the payments and deductibles that beneficiaries proposed payroll tax increase would hurt small would still have to pay. Insurers opposed the businesses and set a "dangerous precedent" home care bill, however, because it threatened that could lead to the "application of the entire to absorb the market for their newest product. Social Security tax to all wages.""18 The In 1985 no insurance company offered a longNational Federation of Independent Business term care policy. By 1987, 72 insurance com(NFIB), an organization that represented small panies had developed some type of long-term businesses, sent members of Congress a list of care product. However, these policies provided businesses in their districts that opposed the inadequate protection and were often fraudumeasure and warned ominously that it would lently administered. An analysis by the House "consider the vote on H.R. 3436 a Key Small Select Committee on Aging of 33 long-term Business Vote for the 100th Congress."19 care insurance policies offered by 25 insurersHome care opponents also waged a public found that most provided little protection relations campaign, demonizing the aged, who against the cost of nursing home care, few were perceived as an omnivorous political were indexed to inflation, many would only force with the potential to overcome business pay for skilled nursing but not custodial care, opposition. The Wall Street Journal described and more than half excluded Alzheimer's dis- the home care bill as "the welfare state on ease, the main cause of nursing home admis- cocaine," supported by "the King Kong known This content downloaded from 137.110.42.201 on Wed, 22 Jul 2020 03:18:47 UTC All use subject to https://about.jstor.org/terms WHY THE UNITED STATES HAS NO NATIONAL HEALTH INSURANCE 37 as the senior citizen lobby. There is secondary somethingconsequence of depriving the both disingenuous and surreal about Clinton today's administration of a key ally. Before the election, the president of the AFL-CIO had elderly lobby . . . They always want morepreferably in a federal program others promisedwill Clinton that the labor movement the "storm troopers" for national have to pay for."20 When the homewould care be bill health insurance. However, labor leaders came to a vote in the House, 99 Democrats and NAFTA as an effort to shift production 144 Republicans voted against it. viewed Following the defeat, the HIAA sent members of to low-wage countries with more lax environmental and labor standards, so instead of workCongress who voted for the bill a letter warn- ing for health care reform, the AFL-CIO ing, "we want to take special notice of your vote last week on Rep. Pepper's home care became involved in fighting NAFTA (Skocpol bill."21 As an alternative, the HIAA lobbied for 1996). and won federal tax incentives to stimulate the The president's Health Security plan was private long-term care insurance market. finally released in October of 1993. The most The battle over home care proved to be comprehensive a domestic policy proposal since useful learning experience for the insurance1965, it would guarantee universal coverage industry. Insurers formed a viable coalition through an employer mandate and contain inflation through purchasing alliances and a with other organizations dedicated to defeating federal health care proposals and devised tacnational health budget. The purchasing would be similar to the the corporate tics and strategies that allowed them to crushalliances a measure that had broad public support. Thatpurchasing coalitions of the 1980s and domibattle prepared the insurance industry for anated by the five largest health insurers: Aetna, fiercer struggle that would be waged in the Prudential, MetLife, Cigna, and Travelers. 1990s over national health insurance. However, smaller specialty firms stood to lose 30 to 60 percent of their business, and insurNational Health Insurance Revisited ance agents would be put out of business entirely. The plan also called for repeal of the health insurance industry's antitrust exemption In 1991 national health insurance moved to under the McCarren-Ferguson Act and made the forefront of political debates when Senator insurers subject to federal anti-trust provisions John Heinz (D-Pa.) died in a plane crash and and consumer protection mandates (Johnson the governor of Pennsylvania appointed Harris and Broder 1996; Skocpol 1996). Wofford, the sixty-five-year-old former presi- The lengthy planning period provided stake- dent of Bryn Mawr College, to replace him. holder groups the opportunity to develop a Wofford was only supposed to serve until strategy a and plan an attack. The most vehespecial election could be held, but he decidedment opponent of Health Security was the Health Insurance Association of America, to run for the regular Senate seat. The littleknown Wofford was trailing far behind his which spent more than $15 million in a multiopponent, Richard Thornburgh, the twice faceted advertising campaign. In the summer elected, popular former governor and U.S.of 1993, the HIAA created the Coalition for attorney general until Wofford raised the topic Health Insurance Choices, involving many of of health insurance. Wofford crushed the same organizations that had fought the Thornburgh in the election, and polls home subsecare bill. Initially, the Coalition sponquently showed that voters identified sored health vague commercials about health care care as a key factor (Johnson and Broder reform. One ad said the purchasing alliances 1996). might be "the first step to socialized medicine" Other candidates seized the issue, and the (Skocpol 1996:137). Another series of ads feaDemocratic party candidate, Bill Clinton, tured a white, middle-class couple confronting made it a feature of his campaign (Hacker 1997). After Clinton won the election, he promised to have a health reform bill for Congress within his first 100 days. Instead a the worrisome possibility of government bureaucrats choosing their health plan. As Health Security won public support, the ads zeroed in on fears people had about how their current insurance coverage would be affected American Free Trade Agreement absorbed the (Jacobs and Shapiro 1995). All the ads invoked president's attention. The NAFTA battle hadan a antistatist theme, that Health Security crisis in Somalia and a battle over the North This content downloaded from 137.110.42.201 on Wed, 22 Jul 2020 03:18:47 UTC All use subject to https://about.jstor.org/terms 38 JOURNAL OF HEALTH AND SOCIAL BEHAVIOR would create a vast, inefficient, favored it. By June andofunrespon1994 public support had declined toand only 44 percent (West and sive government bureaucracy thousands ofLoomis 1999). et al. 2001; Jacobs new bureaucrats (Goldsteen and Shapiro 2000). The Coalition for Health Insurance Choices Interestingly, unlike the 1940s, when the AMA had been the most vocal political opponent of the Truman plan, in the 1990s physiset up an 800 number to enlist grassroots supcians were nearly invisible in the fracas over porters. The Coalition also formed "swat teams" of supporters to write letters and lobby Health Security. The AMA initially endorsed the concept of universal coverage but opposed lawmakers (Center for Public Integrity 1995). any stringent cost controls or regulations that Concerned employers received a thick manual spelling out ways to get employees, vendors,would give managed care an advantage. Some organizations of specialists endorsed the basic and other sympathizers involved in the battle features of the Clinton plan; other physician against the Clinton plan. The effort produced more than 450,000 contacts with members of organizations opposed the same features Congress, almost a thousand for each senator(Tuohy 1999). These disagreements made it impossible for physicians to convey a clear and congress person (Johnson and Broder 1996). message about health care reform. Tellingly, Insurance companies and insurance agents' organizations increased their campaign contributions substantially, with the largest sums the various accounts of Clinton's failed effort going to members of the House Ways and Skocpol 1996; Hacker 1997). Means Committee and the Senate Finance scarcely mention the AMA or the physicians it represented (Johnson and Broder 1996; After the demise of Health Security, health Committee, both of which had jurisdiction policy making moved toward shoring up the over health reform. Members of two House committees that debated health care bills private health insurance system by tightening regulations to make private insurance less insecure. The Health Insurance Portability and received contributions averaging four times that of members not on these committees Accountability Act of 1996 (HIPAA) narrowed (Center for Public Integrity 1995). Insurance the conditions under which companies could agents also organized their own grassroots refuse coverage, allowed people who itemized deductions on their income taxes to deduct a effort (Johnson and Broder 1996). A political force in their own right, they were located in portion of long-term care insurance premiums, every congressional district, active in their and made employer contributions toward the communities, and involved in state and local cost of group long-term care insurance a tax politics (Quadagno 2005). deductible business expense. After HIPPA long-term care insurance sales increased an The HIAA had an ally among small business owners who opposed an employer manaverage of 21 percent a year, with the biggest date and any tax increase. The NFIB mobilized increase occurring in group insurance plans its own grassroots effort against Health offered by employers (Quadagno forthSecurity, dispatching streams of faxes coming). and action alerts from its Washington office to tens The most recent health policy event was of thousands of small business owners. Every enactment of the 2003 Medicare prescription week the NFIB polled 600,000 membersdrug on benefit. Hailed by the Bush administratheir attitudes toward the Clinton plan and tion sentas the biggest overhaul of Medicare since their responses to their congressional represenits inception, the new program would pick up tatives. The NFIB also organized groups75of percent of a beneficiary's drug costs up to activists who attended local meetings whenev$2,250 a year (Hacker and Marmor 2003). er their congressional representatives visited Then, in a confusing twist, coverage would their home districts, and it also conducted semstop until a beneficiary had spent another inars in states that had members on key con$3,600, creating a so-called "doughnut hole" gressional committees. The NFIB also worked (Oberlander 2003). After that, Medicare would through the press, using the influential radio pay 95 percent of any additional drug costs. talk shows to kindle public opposition Also included were tax incentives to encourage (Johnson and Broder 1996). When the first higher income elderly to purchase private poll was taken on the Clinton plan in health insurance policies as a substitute for September of 1993, 59 percent of the public Medicare, $12 billion in subsidies to private This content downloaded from 137.110.42.201 on Wed, 22 Jul 2020 03:18:47 UTC All use subject to https://about.jstor.org/terms WHY THE UNITED STATES HAS NO NATIONAL HEALTH INSURANCE 39 insurance companies to encourage to ing them their sovereign rule, as the abuses of pro offer seniors' policies that compete with fessional authority following the enactment Medicare and $70 billion in subsidies to Medicare and Medicaid roused large firms an employers so they wouldn't drop prescription the insurance industry to seek redress in th drugs from their retiree health plans (although form of managed care. The outcome demonmany analysts doubt that the incentives are strates the fragility of physicians' power bas sufficient to have that effect). The final caveat As physicians' antipathy to national health insurance dwindled-tempered by the benefi was that the federal government was prohibited from negotiating drug prices. of guaranteed payment, splits among variou The no-price-negotiation feature came from specialty groups, and the loss of allies amon the Pharmaceutical Research and Manu- other health professionals and employ facturers of America (PhRMA), with its 620 groups-health insurers moved to the forefro lobbyists. In the first six months of 2003, the of public debates, determined to prevent pa sage of national health insurance and defe PhRMA pumped $8 million into a lobbying campaign against price controls. The "doughany program that might compete with thei nut hole" was a concession to the American products. In some cases, traditional lobbying Association of Health Plans which represents tactics were sufficient to ward off governme managed care firms. The main incentive for intervention; in other instances, they form the elderly to choose an HMO over the tradipolitical coalitions with like-minded organiz tional Medicare program was prescription tions-whether they be small business owner pharmacists, or insurance agents-to creat drugs. If Medicare assumed all drug costs, "grassroots" social movement activities an then HMOs would be a less attractive alterna- tive. Increases in physicians' payments sealed fund public information campaigns designed the deal. The result was a benefit that paidto convince politicians that the public oppos some of the costs for low spenders and most ofhealth care reform. The changing compositio the costs for people with catastrophic drugof the anti-reform coalition, dominated first b expenditures but preserved the free market forphysicians, then by insurers, has obscured th the middle class (Weissert 2003). persistence of stakeholder mobilization as th primary impediment to national health insur ance. CONCLUSION The ironic outcome of each failed atte enact national health insurance was federal Medical sociologists have aptly described action that stimulated the growth of commercial insurance the shifting configuration of power within the and entrenched a market-based health care system from providersalternative to pur- to a public program. In the 1940s chasers but have failed to specify the the way that of national health insurance providfailure the rise of these "countervailing powers" ed atransstimulus to the private health insurance formed the political terrain. From industry. the New The enactment of Medicare in 1965 Deal to the 1970s, the most vehement opporemoved a key constituency, the aged, from the nents of national health insurance were physipolitical debate while preserving a profitable cians. Fearful that government financing ofof the market for private insurers. The segment health services would lead to government concompromises involved in Medicare also led to trol of medical practice, they mobilized against health care inflation, creating a dilemma that this perceived threat to professional sovereignwould jinx all subsequent efforts to enact national health insurance. Health care reformty. Physicians were able to realize their political objectives through the American Medical ers could never again define the problem soleAssociation, which then had the organizational ly in terms of improving access to health care capacity to marshal resources, command a and deserving groups. They now for worthy response from members, achieve deepalso penetrahad to promise to control costs and reform tion into local community politics, shape pub- A national health insurance plan the system. proposed in the 1970s was redirected and led lic opinion through antistatist campaigns, and subsequently influence electoral outcomes. instead to federal support for private HMOs. The historical irony is that the private Thehealth defeat of home care legislation in the insurance system that physicians helped to 1980s provided a stimulus to the long-term construct became a mechanism for undermincare insurance market. This content downloaded from 137.110.42.201 on Wed, 22 Jul 2020 03:18:47 UTC All use subject to https://about.jstor.org/terms 40 JOURNAL OF HEALTH AND SOCIAL BEHAVIOR there must be a for national national leadership responsible The centuries-long struggle health insurance illuminates fundamental fea- for mapping out a grand plan to disseminate tures of American political development. First,ideas, recruit members nationwide, and cultiit suggests that while anti-statism is not avate political insiders (influential congressioncausal force in and of itself it does provide a al committee chairs and civil servants) who powerful weapon that can be deployed in polit-can introduce bills and devise ways to attach ical struggles over the welfare state. Second, ithealth care initiatives to less visible budget suggests that labor movements can use their measures. At the middle level, a reform move"power resources" in ways that reinforce ratherment needs intermediate institutions, such as than transform the play of market forces, butstate labor federations whose leaders can cooralso that the trade union movement has the dinate activities, tap into indigenous social netcapacity to transform the welfare state without works, and disseminate the organizations' forming a political party. Because themodels and ideas (Nathanson 2003). Finally, a American trade unions viewed national health reform movement needs local chapters to funinsurance as an unachievable political goal in nel money to the higher levels of the federation the postwar era, they instead concentrated on and provide grassroots activists who can winning benefits through collective bargain-engage in social action to influence politics at ing. Once won, these private health benefits the local level. This structure ties leaders to created a conundrum in the form of costly one another, links local groups to larger issues, retiree health benefits that encouraged the and affords opportunities for political leverage AFL-CIO to lead a successful campaign forat the local, state, and national levels. Thus, social movement theorists' focus on informal, health insurance for the aged. The Medicare victory resulted from a confluence of historical emergent social and political processes needs conditions and favorable political opportunity to be coupled with an analysis of the way the structures that included an internally unified structure of the state systematically organizes labor movement, Democratic party control of political activity (McAdam and Su 2002). Congress and the Presidency, and a national climate that was sympathetic to initiatives to aid the less privileged. Third, it is apparent thatNOTES the institutional structure of the state in the United States channels political activities in1. A Simplified Blueprint of the Campaign Against Compulsory Health Insurance, National Education Campaign, American ways that blur the distinction between the tactics and strategies of less privileged groups and normal political processes. Just as challengers Medical Association, Whitaker and Baxter, not only engage in grassroots activities but p. 4-12. Library of Congress, Washington, also attempt to gain privileged access to main- DC., Robert A. Taft papers, Box 643, stream politics, so, too, do powerful stakehold- Legislative Files, File: National Program ers with privileged access also manufacture for Medical Care (S. 1679-S. 1581) 1949. grassroots protests to convince political lead-2. Address of President R.L. Sensenich, ers that their interests represent the public will. American Medical Association, Atlantic The similarities in tactics and strategies used by opponents and successful reformers suggest that the structure of the state organizes political activity in systematic ways. This insight 3. City, June 6-10, 1949, Journal of the American Medical Association, June 18, 1949, p. 613. Statement on Truman Health Plan, Journal provides a framework for identifying what of the American Medical Association, May might be required to transcend the network of 7, 1949, Vol. 146, No. 1, p. 114. Taft papers, powerful, vested interests to achieve universal Box 640, Legislative Files, File: Health coverage. Specifically, it suggests that Legislation, 1945. prospects for reform are enhanced when a4. Freedom of choice under the Wagnercoalition is organized in ways that closely mir- Murray-Dingell bill S. 1050 by Marjorie ror the representative arrangements of the Shearon, Nov. 18, 1945, p. 7. Taft Papers. American state (Skocpol, Ganz and Munson Box 640, Legislative Files, File: Health 2000). In keeping with this argument, any Legislation, 1945. reform movement needs an organizational5. "You and Socialized Medicine," pamphlet structure with a federal framework. At the top by the Chamber of Commerce, p. 3. Box This content downloaded from 137.110.42.201 on Wed, 22 Jul 2020 03:18:47 UTC All use subject to https://about.jstor.org/terms WHY THE UNITED STATES HAS NO NATIONAL HEALTH INSURANCE 41 640, Legislative Files, File: Health Legislation, 1945. 2, 1988. Pepper Library, Series 302A, File 42, Box 7. 6. Letter from Louis Orr, M.D. to Dr. Arthur 20. "Elderly Lobby Peppers the House on Schwartz, April 10, 1950. Claude Pepper Health Bill," Wall Street Journal, May 6, Library, Florida State University Libraries, 1988. Series 302A, File 42, Box 7. Pepper Tallahassee, FL., Series S201, Box 93, File Library. 21. Letter from Linda Kenckes, Vice 1. 7. Claude Pepper Oral History, Columbia University Oral History Collection, p. 28. President, Federal Affairs, HIAA. Pepper Library, Series 302A, File 42, Box 7. 8. Gallup Polls Public Opinion, 1935-1971, 2:801. 9. Nelson Cruikshank Oral History, Columbia University Oral History REFERENCES Anderson, G.E, U.W. Reinhardt, P.S. Hussey, and V Collection, p. 75. Petrosyan. 2003. "It's the Prices, Stupid: Why 10. Washington News, Nov. 30, 1963, Journal the United States is So Different from Other of the American Medicare Association, Countries." Health Affairs 22(3):89-105. Vol. 186, No. 9, p. 16-17. Berkowitz, Edward. 1986. "Disability Insurance and 11. Katherine Ellickson Oral History, Columbia Oral History Collection, p. 135. 12. Income Tax Credits to Assist in the the Limits of American History." The Public Historian 8(2):65-82. Bodenheimer, Thomas. 1990. "Should We Abolish the Private Health Insurance Industry?" Purchase of Voluntary Health Insurance." 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Journal of Health Policy, Politics and Law 20(2):329-72. Stepan-Norris, Judith and Maurice Zeitlin. 1995. "Union Democracy, Radical Leadership, and the Hegemony of Capital." American Sociological Review 60:829-850. 2002. Left Out: Reds and America's Industrial Unions. Cambridge, England: Cambridge University Press. Stevens, Beth. 1988. "Blurring the Boundaries: How the Federal Government Has Influenced Welfare. Report No. 359, Part 1, 82nd Congress, 1st Session, May 28, 1951. Washington, DC: U.S. Government Printing Office. . 1964. Blue Cross and Private Health Insurance Coverage of Older Americans. Subcommittee on Health of the Elderly, Special Committee on Aging, July, 1964. Washington, DC: U.S. Government Printing Office. . 1989. Hearings on Medicare Catastrophic Coverage, Senate Finance Committee, July 11, 1989, 1st Session. Washington, DC: U.S. Government Printing Office. Wainess, Flint. 1999. "The Ways and Means of National Health Care Reform, 1974 and Beyond." Journal of Health Politics, Policy and Law 24(2):305-33. Weiss, Lawrence. 1993. "Excellent Welfare Benefits in the Private Sector." Pp. 123-48 in The Politics of Social Policy in the Benefits: Clinton Embraces the Private Health United States, edited by Margaret Weir, AnnInsurance Industry." Socialist Review 24:49-58. Weissert, William G. 2003. "Medicare Rx: Just a Shola Orloff and Theda Skocpol. Princeton, NJ: Princeton University Press. Few of the Reasons Why It Was So Difficult to Street, Debra. 1993. "Maintaining the Status Quo: Pass." Public Policy and Aging Report 13(4): 1, The Impact of the Old-age Interest Groups on 3-6. West, Darrell and Burdette Loomis. 1999. The the Medicare Catastrophic Coverage Act of 1988." Social Problems 40: 431-44. Thompson, Carolyn R. 1990. The Political Sound of Money. New York: W.W. Norton. Wolinsky, Howard and Tom Brune. 1994. The Evolution of the Medicare Catastrophic Health Serpent on the Staff. The Unhealthy Politics of Care Act of 1988. Ph.D dissertation, Department the American Medical Association. New York: of Political Science, Johns Hopkins University, Putnam. Baltimore, MD. Young, Michael. 2002. "Confessional Protest: The Tuohy, Carolyn. 1999. Accidental Logics. New Religious Birth of U.S. National Social York: Oxford University Press. Movements." American Sociological Review U.S. House of Representatives. 1989. Private Long- 67:660-88. term Care Insurance: Unfit for Sale? Zelizer, Julian. 1998. Taxing America. Cambridge, Subcommittee on Health and Long-Term Care England: Cambridge University Press. Jill Quadagno is Professor of Sociology at Florida State University, where she holds the Mildre Claude Pepper Eminent Scholar Chair in Social Gerontology. She has been a recipient of a National Foundation Visiting Professorship for Women, the Distinguished Scholar Award of the Am Sociological Association Section on aging, a John Simon Guggenheim Fellowship, and an Am Council of Learned Societies Fellowship. She is past-president of the American Sociological Asso (1997-98). She is the author of 12 books and more than 50 articles on aging and social policy issu book The Color Welfare was a finalist for the C. Wright Mills Award and won the award for the Outs Book on the Subject of Human Rights from the Gustavos Meyers Center for the Study of Human R An Investigator Award in Health Policy Research from the Robert Wood Johnson Foundation provid funding for her to conduct the historical research for her book, One Nation, Uninsured: Why the U No National Health Insurance, which will be published by Oxford University Press in February 20 This content downloaded from 137.110.42.201 on Wed, 22 Jul 2020 03:18:47 UTC All use subject to https://about.jstor.org/terms Cultural Categories and the American Welfare State: The Case of Guaranteed Income Policy Author(s): Brian Steensland Source: American Journal of Sociology, Vol. 111, No. 5 (March 2006), pp. 1273-1326 Published by: The University of Chicago Press Stable URL: http://www.jstor.org/stable/10.1086/499508 Accessed: 28-11-2016 23:02 UTC JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org. Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at http://about.jstor.org/terms The University of Chicago Press is collaborating with JSTOR to digitize, preserve and extend access to American Journal of Sociology This content downloaded from 69.196.45.54 on Mon, 28 Nov 2016 23:02:02 UTC All use subject to http://about.jstor.org/terms Cultural Categories and the American Welfare State: The Case of Guaranteed Income Policy1 Brian Steensland Indiana University There is considerable evidence that cultural categories of worth are central to the ideological foundation of the American welfare state. However, existing perspectives on U.S. welfare policy development grant little explanatory power to the role of culture. For this reason, they cannot adequately explain the dynamics of an important, but frequently overlooked, episode in American welfare state history: the rise and fall of guaranteed annual income proposals in the 1960s and 1970s. The author outlines three mechanisms—schematic, discursive, and institutional—through which culture can influence policy outcomes. He then argues that cultural categories of worthiness affected welfare policy development through their constitutive contribution to cultural schemas, their deployment by actors as resources in expert deliberation and public discourse, and their institutionalization in social programs that reinforced the symbolic and programmatic boundaries between categories of the poor. The author discusses how these cultural mechanisms can be integrated with existing class- and institution-based accounts of welfare policy development. Why does the United States not guarantee basic income security for all its citizens? There are, of course, numerous answers to this question. Yet if the major historiographical accounts of American welfare policy agree on a central theme, it is that 20th-century policy development was shaped 1 For valuable comments on previous drafts, I would like to thank Art Alderson, Elizabeth Armstrong, Tim Bartley, Chris Bonastia, Clem Brooks, Tom Gieryn, John Skrentny, Robin Stryker, Ann Swidler, Pam Walters, Melissa Wilde, the Junior Faculty Working Group at Indiana University, and the AJS reviewers. Financial support for the research came from the National Science Foundation and the Center of Domestic and Comparative Policy Studies at Princeton University. Direct correspondence to Brian Steensland, 744 Ballantine Hall, Department of Sociology, Indiana University, Bloomington, Indiana 47405. E-mail: bsteens@indiana.edu 䉷 2006 by The University of Chicago. All rights reserved. 0002-9602/2006/11105-0001$10.00 AJS Volume 111 Number 5 (March 2006): 1273–1326 This content downloaded from 69.196.45.54 on Mon, 28 Nov 2016 23:02:02 UTC All use subject to http://about.jstor.org/terms 1273 American Journal of Sociology by deeply embedded cultural categories of worth (Katz 1986, 1989; Patterson 1994). Put most simply, some people were considered to be more worthy of government assistance than others. The “deserving” poor were those people not expected to work because of their age, gender, family status, or physical limitations, and they were therefore deemed as meriting government support. The “undeserving” poor, on the other hand, were expected to work and consequently warranted only limited, haphazard government assistance. This pattern of cultural classification has been documented in interviews (Halle 1984; Hochschild 1981; Lamont 2000; Rieder 1985), public opinion research (Cook and Barrett 1992; Kluegel and Smith 1986; McCloskey and Zaller 19...
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