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
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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
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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).
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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
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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
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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
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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
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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-
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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
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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.
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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
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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
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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
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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
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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
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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.
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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
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WHY THE UNITED STATES HAS NO NATIONAL HEALTH INSURANCE 41
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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
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1.
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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
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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
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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
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American Journal of Sociology
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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
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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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