Health Insurance in America

Millions of Americans depend on their jobs for health insurance. But that's not the case in many other wealthy countries. How did the U. S. end up with a system that's so expensive, yet leaves so many people vulnerable? On this episode, how a temporary solution created an everlasting problem. This episode originally ran in 2020 asThe Everlasting Problem https://www.npr.org/2020/09/28/917747287/the-everlasting-problem. Guests: Sherry Glied, Dean of the Robert F. Wagner Graduate School of Public Service at New York University Paul Starr, professor of sociology and public affairs at Princeton University Jim Morone, political science professor at Brown University and co-author of the book, The Heart of Power Support public media with NPR+ and enjoy perks for over 25 podcasts like this one. This show’s perks include sponsor-free listening. Learn more at plus.npr.org http://plus.npr.org/. See pcm.adswizz.com https://pcm.adswizz.com for information about our collection and use of personal data for sponsorship and to manage your podcast sponsorship preferences. NPR Privacy Policy https://www.npr.org/about-npr/179878450/privacy-policy

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• 0:00Speaker 00

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• 0:21Rund Abdelfatah?

  Imagine for a moment it's the mid-1800s.

• 0:31Rund Abdelfatah?

  We're walking down a long, dimly lit corridor of a hospital in the US.

• 0:38Rund Abdelfatah?

  Rows of beds line the walls of a large, open room.

• 0:43Rund Abdelfatah?

  We step over a small puddle of water, probably from that leak in the ceiling.

• 0:51Rund Abdelfatah?

  And a few patients lie coughing, in tattered clothes.

• 0:56Rund Abdelfatah?

  For most Americans, this is the last place they'll want to come if they get sick.

• 1:06Speaker 02

  A hospital was a place where poor people went to die.

• 1:08Speaker 03

  Hospitals were, they were not high-tech places by any means.

• 1:13Speaker 02

  We didn't really know very much of the things that we know today about how disease happens, how to keep infection from spreading, how to treat people surgically. We didn't have the kind of knowledge we have today.

• 1:25Speaker 04

  At the time, doctors are still giving patients mercury, a toxic substance, to treat things like constipation or syphilis and bloodletting to help balance the body.

• 1:36Rund Abdelfatah?

  People are treated in their own homes, either by someone they know or a local doctor. But they almost never step foot in a hospital, even for surgeries.

• 1:46Speaker 04

  At this point, pretty much no one has indoor plumbing, phones, or cars.

• 1:50Rund Abdelfatah?

  The average life expectancy is around 40, and more than 30% of children don't make it to their fifth birthday.

• 1:59Speaker 04

  The average American spends almost nothing on healthcare every year. And the idea of health insurance or healthcare debt doesn't even exist yet.

• 2:11Rund Abdelfatah?

  But change is happening across society. And before long, healthcare in the US will look radically different.

• 2:26Speaker 05

  Healthcare billing is complicated.

• 2:28Speaker 06

  Sticker prices of hundreds of medicines went up.

• 2:31Speaker 05

  Some healthcare is unexpected, and it's expensive.

• 2:33Speaker 06

  Widespread consumer anger over denied claims and the high costs of care. Most Americans have had at one time or another frustration and helplessness with the healthcare industry. Oh, we have found the thing that can bring our divided country together, and it seems to be hating big healthcare.

• 2:51Rund Abdelfatah?

  You're listening to Throughline from NPR.

• 2:54Speaker 04

  Where we go back in time?

• 2:56Rund Abdelfatah?

  To understand the present.

• 2:59Speaker 04

  Hey, I'm Ramtin Arablouei.

• 3:01Rund Abdelfatah?

  And I'm Randa Abdel Fattah.

• 3:03Speaker 04

  And on this episode, the cost of our health.

• 3:10Rund Abdelfatah?

  During the midterms, candidates on both sides of the aisle promised relief from rising healthcare costs. Progressive Democrats campaigned on Medicare for All, a type of system that would cover everyone. Two-thirds of American adults support that idea. Republicans, on the other hand, prefer less government intervention. Even so, some Republicans campaigned on instituting price caps to lower costs. The US remains one of the wealthiest countries in the world without a universal healthcare system. Instead, a majority of Americans depend on their jobs for health insurance. So we're revisiting this episode, where we go back to the moment the US started on

• 3:52Rund Abdelfatah?

  this path, when the country faced some key decisions about healthcare and how to pay for it, and came up with a temporary solution that created an everlasting problem.

• 4:08Speaker 02

  Hi, this is Liz from France, and you're listening to Throughline on NPR. Thank you.

• 4:16Speaker 00

  Stay tuned for the following announcements and messages from our sponsors. This message comes from Granger. This is the story of the one. As a procurement manager for a hospital system, she keeps every facility in her network stocked and ready. That's why she counts on Granger to be her single source for thousands of products, from disinfectants to lighting, air filters, and more. And with fast, dependable delivery, Granger helps her keep every facility stocked, safe, and running smoothly. Call 1-800-GRANGER, click Granger.com, or just stop by. Granger, for the ones who get it done.

• 4:53Speaker 06

  This message comes from Midi Health. Most women never get real answers about their hormonal health. Midi is changing that with virtual care covered by most major insurances. Understand your hormones. Visit joinmidi.com to book your first visit today.

• 5:09Speaker 00

  This message comes from Quo. You're on a job, in a meeting, slammed, and a customer calls. If nobody picks up, they go to your competitor. That's why over 90,000 companies choose Quo, the business phone system built for busy teams. Smart call routing sends calls to the right person. Shared numbers let your team cover for each other. And an AI agent picks up when nobody can, capturing every lead so nothing falls through the cracks. Always say hello with Quo. Try it free at quo.com/NPR.

• 5:41Speaker 04

  Part one, cogs in the wheel.

• 5:46Rund Abdelfatah?

  It had begun in the late 18th century. The change, slowly at first, or so it seemed, a train here and there, taking people somewhere new.

• 5:58Rund Abdelfatah?

  Then it sped up. More machines, more factories, more people leaving farms for cities. And by the early 1900s, it was an undeniable reality. The US was changed.

• 6:13Rund Abdelfatah?

  Its agrarian spirit had faded, and industry was king.

• 6:29Speaker 04

  In this brave new world, industrial workers weren't their own bosses. In fact, workers weren't all that different from the factory conveyor belts they patrolled. They were sort of cogs in a wheel. And unlike on the farm, where if they got sick or hurt, other family members could just pick up the slack and keep the work going, and the family fed, in a factory, it wasn't that simple.

• 6:58Speaker 02

  When you have people working in factories, they're not substitutable for one another within the family. Once the breadwinner, you know, is injured, the whole family is going to suffer. You need to develop--

• 7:08Speaker 04

  This is Sherry Glied. She's dean of the Robert F. Wagner Graduate School of Public Service at New York University.

• 7:16Speaker 02

  The main cost that people faced if they became ill was that they would no longer be earning income to support themselves or their families. So the financial consequence of sickness was not the cost of paying your medical bills, because mostly you avoided those, but really the cost of continuing to put food on the table when you were sick.

• 7:41Rund Abdelfatah?

  By the 1910s, a potential solution was being floated.

• 7:45Speaker 02

  You might think of it as sickness insurance, a kind of disability insurance, providing people who were injured on the job with financial support.

• 7:55Rund Abdelfatah?

  And by 1915, these sickness funds covered around 8 million workers.

• 8:01Speaker 02

  And the United States is not in any way unique here. The same kinds of developments are happening in other countries.

• 8:09Speaker 03

  The first country to introduce compulsory health insurance, that is, health insurance with a cost of which was required to be paid by both workers and employers, that country was Germany in 1883.

• 8:23Speaker 04

  1883.

• 8:25Speaker 03

  These were plans that covered both what we would call paid sick leave and medical bills.

• 8:33Speaker 04

  And by the time Americans were starting to think about this in the early 1900s, Germany was already starting to mandate employer-based coverage to many more employees beyond industrial workers.

• 8:46Speaker 03

  The labor movement was much weaker in the United States. There wasn't a strong socialist party. The two major parties in the United States, unlike the major parties in Europe, were not looking for ways to co-opt the appeal of socialists. And so they didn't have the motivation to introduce the kind of wide-ranging social insurance programs that Germany introduced.

• 9:10Rund Abdelfatah?

  By the way, this is Paul Starr.

• 9:12Speaker 03

  I'm a professor of sociology and public affairs at Princeton University.

• 9:17Speaker 04

  So at this point, it wasn't that the US was necessarily behind the curve, but more that Germany was ahead of it.

• 9:42Rund Abdelfatah?

  Meanwhile, a sort of revolution in medicine was underway in the US. Doctors were becoming more professionalized with more rigorous curriculum and tougher licensing criteria.

• 9:53Speaker 02

  The thought changes from this being a guild of kind of independent practitioners to medicine having this more exalted status, based in science. There's actually progress in healthcare in the 1920s, and hospitals start opening that are not killing people, and people begin to use them. The young doctor joins the hospital staff. Here, he is brought face to face--

• 10:16Rund Abdelfatah?

  With the realities of medicine and of life.

• 10:22Rund Abdelfatah?

  Life at this time was changing for many Americans, modernizing. Cars, radios, and telephones were becoming more common. Women could vote. And the average lifespan in the US was about 54 years, almost a decade longer than it had been in 1900.

• 10:40Speaker 02

  Instead of hospitals just being places where poor people go, they become a place that higher-income people go, particularly for childbirth, and medical care expenses start to go up for people.

• 10:53Rund Abdelfatah?

  And pretty quickly.

• 10:55Speaker 03

  The hospitals confronted a financial problem. Many of their patients couldn't pay when bills were due.

• 11:03Speaker 02

  And the hospitals are like, wait a minute, this is not going to work for us. We had better come up with some way to make sure that people have money when they come to the hospital.

• 11:10Speaker 03

  So why not establish a program to get people to prepay for their hospital care?

• 11:17Speaker 02

  It will be run by the healthcare providers, so there's no government intervention or anything to worry about here.

• 11:23Speaker 03

  And that was the beginning of Blue Cross and the beginning of private insurance.

• 11:31Rund Abdelfatah?

  Private medical insurance started in the US with Blue Cross, which would become Blue Cross Blue Shield. Up to this point, if someone went to the hospital, they either paid out of pocket, or if they couldn't pay, charitable organizations often stepped in to cover the costs. But as treatment got more expensive, that was becoming less realistic.

• 11:53Speaker 04

  For Blue Cross, the biggest challenge was actually figuring out how to sell it.

• 11:59Speaker 02

  Because people who know that they're going to need to go to the hospital, they're more likely to buy the product than the people who don't expect to use the hospital. And then the insurance product is going to crash.

• 12:11Speaker 02

  And they realized that it's a lot cheaper and easier to sell it to employer groups than it is to go door-to-door and sell it to individuals.

• 12:20Speaker 04

  So they rolled out their prototype in Dallas, Texas, offering insurance plans to teachers through their schools.

• 12:27Speaker 02

  And it's such a success that it spreads all over the country.

• 12:36Rund Abdelfatah?

  But it was still available to very few people relative to the general population. And these original plans were limited.

• 12:45Speaker 03

  They did not, at that point, have in mind health insurance as a way for rigorally paying ordinary medical bills.

• 12:52Rund Abdelfatah?

  Doctors' visits weren't covered at all.

• 12:55Speaker 03

  The American Medical Association was against third-party payment. The doctors didn't want anybody butting into their domain.

• 13:04Speaker 04

  The American Medical Association was and is the largest association of physicians in the country. To get their point across, they made this 1930s film called Men of Medicine.

• 13:17Speaker 06

  Our first need is to join in a nationwide effort against those causes of disease and death for which we have scientific weapons of unquestioned power.

• 13:27Speaker 03

  The American Medical Association was very well organized in those days. It was the single most powerful group in the whole healthcare arena.

• 13:37Speaker 04

  And they were nervous about this new thing: health insurance.

• 13:42Speaker 02

  Doctors, at this point, they're basically small businessmen. And they have the politics of small businessmen. They're conservative.

• 13:51Speaker 04

  Doctors saw any threat to their autonomy as a threat to their bottom line, which could jeopardize their business and their profits. But a few years in, they decided to try their own hand at the private health insurance market, in part because they figured it was better for them than the alternative.

• 14:10Speaker 06

  This nation is asking for action, and action now.

• 14:16Speaker 04

  Nationalized health insurance.

• 14:24Speaker 06

  The withered leaves of industrial enterprise lie on every side. Farmers find no market for their produce, and the savings of many years in thousands of families are gone.

• 14:38Rund Abdelfatah?

  When he entered office in 1933, President Franklin D. Roosevelt was facing the worst economic crisis in American history.

• 14:46Speaker 06

  Only a foolish optimist can deny the dark realities of the moment.

• 14:51Rund Abdelfatah?

  Widespread poverty, massive unemployment, hunger, and how to pay for health care.

• 14:58Speaker 02

  This new idea that, my goodness, people are now beginning to actually face significant costs for medical treatment, not only for illness.

• 15:09Rund Abdelfatah?

  He knew he needed to act fast to address all these problems, so...

• 15:14Speaker 03

  Roosevelt put together a team of people, a team of experts, to put together what's now the Social Security Program and Social Security Act.

• 15:24Speaker 04

  This is Jim Morone. He's a political science professor at Brown University and co-author of the book, The Heart of Power.

• 15:32Speaker 03

  It would have Social Security, unemployment compensation, aid to families with dependent children, later known as welfare, the whole package of things that we now think of as the welfare state, were put together between '34 and '35, and national health insurance is very much part of it. But physicians in the United States went nuts.

• 15:59Speaker 03

  They just didn't want to hear about the government taking over.

• 16:05Speaker 04

  The American Medical Association publicly denounced Roosevelt's health insurance plan.

• 16:11Speaker 03

  There was a great deal of trust in doctors at that point. And people were very deferential to doctors' judgments. And so the opposition of the American Medical Association would have been very costly to Roosevelt and might have blocked Social Security from passage. Roosevelt, who was getting advice from a very famous physician, who kept telling him, Franklin, this is not going to work.

• 16:43Speaker 04

  Eventually, Roosevelt caved to the pressure and removed health insurance from the bill to make sure that the rest of his social welfare plans went through.

• 16:52Speaker 03

  You know, it was probably a rational, political choice that Franklin Roosevelt made.

• 17:48Rund Abdelfatah?

  America goes to war to save the homes and ideals of free men from Axis domination.

• 17:56Rund Abdelfatah?

  Before the US entered World War II at the end of 1941, only about 4% of the US population had health insurance. Everyone else either paid out of pocket, relied on charity to help cover costs, or just avoided hospitals altogether.

• 18:14Speaker 06

  This whole nation of 130 million free men and women and children is becoming one great fighting force.

• 18:24Rund Abdelfatah?

  As more and more men went off to war, the country faced a labor shortage. Factories needed workers fast to build ships, tanks, and weapons. And economists worried that if businesses kept raising salaries to compete for workers, inflation would soon spiral out of control.

• 18:41Speaker 06

  We are learning to ration materials, and we must now learn to ration manpower.

• 18:49Speaker 03

  The administration puts wage and price controls on the economy.

• 18:54Speaker 02

  So what that means is that industries can't raise their prices, but also workers can't raise their wages. And this is a period of growing unionization in the United States, so...

• 19:03Speaker 04

  So on the one hand, unions who'd agreed not to strike during the war weren't able to do anything about these freezes. And on the other...

• 19:11Speaker 02

  Here are these employers who want to attract workers to their firms, but they can't raise wages, which would be the normal way you would do it. And so what do they do? They decide to start offering people benefits that won't violate the wage and price control rules, but that will be attractive and get people to come to their workplaces.

• 19:31Speaker 03

  And they hit upon this relatively unknown thing called health insurance.

• 19:37Speaker 06

  They said, come to work with us and we'll pay your health insurance.

• 19:42Speaker 04

  Employers got workers, workers got health insurance, and unions got a new bargaining chip. Sounds like a win-win-win. But this raised some questions at the Internal Revenue Service.

• 19:56Speaker 06

  What's the IRS going to do about health insurance?

• 19:59Speaker 04

  Ultimately, the IRS decided not to tax this new employee-sponsored health insurance, making it a lot cheaper for employers.

• 20:07Rund Abdelfatah?

  And you'll want to hold on to that idea. It becomes really important later.

• 20:12Speaker 02

  So we start to see the broadening of this initial Blue Cross effort, right? Which was really instigated by hospitals.

• 20:19Speaker 06

  So during World War II, really completely without anybody planning it, the United States got the roots of a private insurance system.

• 20:30Speaker 03

  Many people argue that the exclusion of employer contributions to health insurance from wage-price controls during World War II was the cause of the development of employer-sponsored insurance. I don't agree with that.

• 20:49Rund Abdelfatah?

  Okay, so without getting too in the weeds here, basically, Paul's argument is that the real cause of our employer-based insurance system was not what the government did to control parts of the economy, but what it didn't do. Because without government intervention...

• 21:04Speaker 03

  Employers were in the best position of any nongovernmental organization to spread the cost of insurance and to manage it administratively.

• 21:17Speaker 04

  Plus, hospital health care was getting so much better that it was becoming essential to people's lives in a way that it hadn't before.

• 21:25Speaker 02

  The key was the development of the sulfa drugs and penicillin, which made surgery effective. That actually was transformative for all kinds of health care. Suddenly made it important for people to have health insurance.

• 21:38Rund Abdelfatah?

  Employer-sponsored health insurance was improvised as a solution to a temporary problem: wage-price controls. But it wasn't a foregone conclusion that the US would continue down that road.

• 21:51Speaker 06

  Each hour in every 24 is filled with a steady drone of Allied aircraft dominating the sky. They have ruined the chances of escape for the Axis. The Nazis and Fascists have their backs against a very insecure wall. The last great battle in Africa is turning into a catastrophe. Coming out of 1943, 1944, it's now clear the United States is going to win World War II. Roosevelt, about to hit his fourth term, is looking for another crusade to run.

• 22:18Rund Abdelfatah?

  While Roosevelt was winning the war, his health was failing, and he was determined to leave the country as prosperous and peaceful as he could before taking his final breaths. So he reached out to a trusted advisor, Samuel Rosenman.

• 22:36Speaker 03

  He had asked Samuel Rosenman to prepare a speech.

• 22:40Speaker 06

  He said, Sam, write me a plan.

• 22:42Speaker 03

  About national health insurance.

• 22:45Rund Abdelfatah?

  Only about 10% of the US population had health insurance when the war began. And it was becoming clear, as the war was winding down, that this system didn't work for everyone. If you were poor, black, elderly, unemployed, working in a small business or on a farm, you were almost definitely uninsured.

• 23:06Speaker 06

  Roosevelt didn't care about the plan. What he cared about was a path to win the plan. He told Sam that. Just get together a plan and then tell me how to win it.

• 23:30Speaker 06

  From his beloved second home at Warm Springs, Georgia, the body of Franklin Delano Roosevelt moves on the first stages of its journey to his final resting place. Roosevelt dies in April of 1945, just before the end of World War II. And this guy no one had ever heard of before, Harry Truman, who'd barely even met Roosevelt. They just put him on the ticket. He's a senator from Missouri. He seems to be a kind of a moderate. He takes over and he says to the press, the first time he meets them, "Boys, if you ever prayed for anyone, pray for me now."

• 24:13Speaker 04

  Jim Morone says that Truman, in his third week in office, called up Sam Rosenman and asked to see the plan that Rosenman had written for Roosevelt just before he died.

• 24:24Speaker 06

  And to everyone's shock, Truman grasps this plan as his great mission in life.

• 24:34Speaker 06

  This comes from the grave from the great man. And Truman makes it this thing of his career.

• 24:54Rund Abdelfatah?

  Coming up, Truman wages a battle for universal health insurance.

• 25:06Speaker 05

  Hi, my name is Jonathan and I'm from Dallas, Texas. And you're listening to Throughline from NPR. I have been listening to this show nonstop for the last 12 hours and it is amazing. Thank you so much.

• 25:21Speaker 00

  Stay tuned for the following announcements and messages from our sponsors. This message comes from Granger. This is the story of the one. As a maintenance supervisor at a manufacturing facility, he knows keeping the line up and running is a top priority. That's why he chooses Granger. Because when a drive belt gets damaged, Granger makes it easy to find the exact specs for the replacement product he needs. And next-day delivery helps ensure he'll have everything in place and running like clockwork. Call 1-800-GRANGER, click Granger.com, or just stop by. Granger, for the ones who get it done.

• 25:57Speaker 06

  This message comes from Midi Health. Most women never get real answers about their hormonal health. Midi is changing that with virtual care covered by most major insurances. Understand your hormones. Visit joinmidi.com to book your first visit today.

• 26:13Speaker 00

  This message comes from Quo. You're on a job, in a meeting, slammed, and a customer calls. If nobody picks up, they go to your competitor. That's why over 90,000 companies choose Quo, the business phone system built for busy teams. Smart call routing sends calls to the right person. Shared numbers let your team cover for each other. And an AI agent picks up when nobody can, capturing every lead so nothing falls through the cracks. Always say hello with Quo. Try it free at quo.com/NPR.

• 26:56Speaker 04

  Part two, whose health care is it?

• 27:03Rund Abdelfatah?

  It's 1945. World War II has just ended. And Harry Truman, who's made universal health insurance a key part of his presidency, has been in office for just four months. And on the other side of the Atlantic, health care is also on the minds of governments across Europe.

• 27:21Speaker 04

  Thing is, in the aftermath of World War II, Western Europe and the US looked very, very different.

• 27:28Speaker 03

  Well, Western Europeans had experienced the war directly, and many of their cities were in wreckage.

• 27:36Speaker 06

  And so they are incredibly poor. They're still rationing food for the years after World War II.

• 27:43Speaker 05

  20 million unfortunate children of Europe are waiting and hoping for a life that has brighter things to offer than unending hunger and sadness.

• 27:56Speaker 06

  Contrast the United States. We were an economic colossus, unlike anything else in the 20th century. No country in the 20th century has ever been as economically dominant as the United States was coming out of World War II.

• 28:14Rund Abdelfatah?

  With the economy in shambles, European countries needed to provide people with social services so they could survive: shelter, clothing, a hot meal, and health care.

• 28:27Speaker 02

  So it wasn't until really after the Second World War that you see the big spread of universal health insurance systems across Europe.

• 28:34Speaker 04

  Every country's health care system looked a little different. But there were two basic models of universal health care that emerged. One in Germany, based on payroll deductions and government control of rates. And one in Great Britain, the National Health Service.

• 28:50Speaker 06

  This new health service will be organized on a national scale as a public responsibility. The cost of the service will be met from rates, taxes, and national insurance. And so everyone will pay for it. And everyone will benefit from it.

• 29:05Speaker 03

  The United States also faced a choice during the late 1940s, when President Truman proposed national health insurance. But the United States went the opposite direction from Great Britain and from other European countries.

• 29:27Speaker 06

  It does my heart good to see the green fields of this nation once more. They are a wonderful sight.

• 29:37Speaker 03

  So Harry Truman succeeded Franklin Roosevelt on Roosevelt's death. And then he faced a very difficult 1948 election campaign. He was being challenged from the left by the Progressive Party that nominated Henry Wallace, who had been, earlier had been vice president under Roosevelt. And Truman also was facing a challenge from the Southern Democrats, from the Dixiecrats. So the Democratic Party was very much in danger of splitting in 1948, which would have allowed, possibly allowed, the Republican candidate, Thomas Dewey, to win the presidential race.

• 30:20Speaker 06

  50 different reporters all made predictions about who would win, and all 50 chose Thomas Dewey of New York.

• 30:27Speaker 04

  With control of the Senate a vital question, both candidates will visit the

• 30:31Speaker 03

  States with the closest Senate races. So Truman needed something to rally the Democratic troops.

• 30:37Rund Abdelfatah?

  And national health insurance became one of his rallying cries.

• 30:44Speaker 06

  Truman got on his train when whistle stopping through. A 16-day coast-to-coast tour lies ahead as the Truman special pulls out of Washington. He wasn't very good at speeches, but his staff discovered that if you just give him a couple of talking points, he could really bang them out. Then he dashes to San Francisco, here in two more major addresses. More about national health insurance, that and helping out labor.

• 31:10Speaker 04

  Truman recognized something important. Healthcare was advancing fast, allowing people to live longer and healthier. The average life expectancy was now 68 years. It was no longer rational for people to avoid hospitals because the care was just too essential.

• 31:27Rund Abdelfatah?

  Problem was, many people were struggling to pay for that healthcare. In the post-war economy, the middle class was growing. And whereas poor people could get help paying for their healthcare from charity programs, and wealthy people could pay out of pocket, the middle class was largely left out. So, national health insurance was their way in.

• 31:51Speaker 06

  I'm not asking you just to vote for me. Vote for yourselves. Vote for your farm. Vote for the standard of living that you won under a democratic administration. Get out there on election day and vote for your future.

• 32:10Speaker 05

  While the Dewey Warren ticket anticipated an early victory, in polling places, the people ran up a record-breaking vote for the man who was to run the country for another four years.

• 32:20Speaker 06

  When Truman amazingly won, and he won by a lot, he actually won by 4% of the vote, despite the fact that he was so far behind, he promised, "This will be the turn for national health insurance." And everybody thinks this is going to be a national health insurance moment.

• 32:40Rund Abdelfatah?

  But Truman's vision of universal health insurance faced an uphill battle when it came time to pass actual legislation.

• 32:49Rund Abdelfatah?

  There was opposition from American industries, who were thriving, and from unions, who, remember, could use health insurance as a bargaining chip with employers.

• 32:59Speaker 02

  The US is a very rich country at this point. Unions are powerful, and private health insurance begins to grow very rapidly. And the opposition says, "We don't need universal health insurance, because private health insurance is already expanding so rapidly." Through employers, people are getting their coverage so quickly, so this problem is going to take care of itself. The government doesn't need to step in.

• 33:23Speaker 04

  And Congress was stacked against Truman, too. He faced opposition from Republicans, who were fed up with the FDR New Deal era of big government. And...

• 33:33Speaker 06

  Southern Democrats, segregationists, really pissed at Truman because he's pushing civil rights along with healthcare.

• 33:42Speaker 04

  One of the main groups who would benefit from universal health insurance were African-Americans. The Southern Democrats told Truman in no uncertain terms that they would not finance his plan.

• 33:55Speaker 06

  They're not even going to hold hearings. This thing isn't going through. The head of the Senate Finance Committee says this thing is going to get a hearing over my dead body.

• 34:08Rund Abdelfatah?

  So Truman's staff got to work stripping all the finance provisions out of the health bill.

• 34:12Speaker 06

  That means it doesn't have to go before Senate Finance. It could go through a more friendly committee.

• 34:17Rund Abdelfatah?

  And even though he knew getting it passed was a long shot, the next time Truman went to Congress, he was going to push for this revised bill anyway. A last-ditch effort to make universal health insurance a reality.

• 34:35Speaker 05

  In recognizing a communist, physical appearance counts for nothing. If he openly declares himself to be a communist, we take his word for it.

• 34:44Speaker 04

  Meanwhile, the world was changing yet again.

• 34:47Speaker 05

  If a person consistently reads and advocates the views expressed in a communist publication, he may be a communist.

• 34:56Speaker 06

  If you went back and read the newspapers from this era, oh, national health insurance hit the headlines every now and then. But what was in the headlines day after day after day?

• 35:08Speaker 04

  The Red Scare.

• 35:10Speaker 05

  If a person does all these things over a period of time, he must be a communist.

• 35:20Speaker 04

  This gave Truman's opponents even more ammunition.

• 35:25Speaker 03

  The opponents said that national health insurance was a communist idea, a pink idea, you know, a Soviet plot.

• 35:37Speaker 03

  And at that time, that kind of opposition, you know, was deadly.

• 35:43Speaker 04

  That idea was pushed hard by the American Medical Association, who was involved all along in the fight to take down the bill. The AMA was determined to defeat it and the idea of universal health insurance, once and for all.

• 35:59Speaker 06

  The AMA, the American Medical Association, they're not going to leave it to chance. So, they have a huge campaign.

• 36:09Rund Abdelfatah?

  The campaign, unprecedented in scope, was designed and run by a political consulting firm called Campaigns, Inc. It was run by a husband-and-wife team based first in San Francisco and then Chicago. They're credited with creating the playbook for political lobbying and negative advertising in politics.

• 36:31Speaker 06

  They inundated Congress with letters, with advertisements, all kinds of very clever things. And what they started to say was, "The private way is the American way." Socialism and national health insurance are basically the same thing.

• 36:51Speaker 04

  It was just attack after attack after attack on Truman.

• 36:55Speaker 06

  He got a bunch of letters. One from a congressman from West Virginia named Key. And Key says, here's a letter from a constituent, and he says, "Why should we pay for big, healthy men to get national health insurance when they should get a job?" And Truman would write blistering letters back, saying, "This guy ought to learn that the horse and buggy era is over, that it's a modern economy, that lots of people fall in the cracks. We have to take care of everyone. We take care of everyone because that's who we are." He practically screamed at people who challenged that premise. He just thought they were living in the 19th century.

• 37:36Speaker 04

  And then, the AMA turned up the heat.

• 37:40Speaker 03

  It got other organizations on board, other healthcare groups, various employer groups. It recruited just an overwhelming army of support.

• 37:54Speaker 06

  And meanwhile, the AMA ran these advertisements that had a 19th-century picture by a painter named Luke Fieldus of a doctor sitting all night, it was obvious the sun was rising, in front of a girl, while the mother and the father weep in the background. And the caption is, "Keep politics out of this picture." Very effective advertising.

• 38:21Rund Abdelfatah?

  But Truman's team wasn't going to just take punches. They fought back against the AMA's campaign. At least, they tried to.

• 38:30Speaker 06

  They took out full-page ads that said, "The President has told us, his bill is not socialism." Talking about letting the other side define the terms of the debate.

• 38:43Rund Abdelfatah?

  Even Eleanor Roosevelt weighed in. She wrote, "Health is not a thing based on partisan politics, and public health should not be regarded, either by officials in Washington or by doctors, as a political football. The American Medical Association, for reasons best known to its own leaders, but which sometimes seem somewhat selfish to the layman, has decided to oppose most of these plans. I am only a layman, and I don't imagine that this bill is the last word or the best health program that will ever be developed. But it is a step in the right direction. And we seem to forget that democracy functions by taking one step at a time. As more people become convinced of the value of something,

• 39:27Rund Abdelfatah?

  it becomes more universally accepted. The majority will decide in the long run."

• 39:39Speaker 04

  These efforts were no match for the AMA's advertising blitz. In total, Campaigns, Inc. distributed over 100 million pieces of literature attacking Truman's plan. And by the time his revised bill got back to Congress, the writing was on the wall.

• 39:59Speaker 06

  Truman got shellacked. He just completely got defeated.

• 40:05Speaker 06

  You know, he had run a great campaign, but he had no idea how to get a law through Congress. Congress itself was hostile. It just wasn't going to pass this thing. It didn't even have financing. So even if it passed, it wasn't going to, wasn't going to go anywhere, because what's a national health insurance bill without any financing provisions? But his people fought. They fought so hard, and they just got so badly beaten.

• 40:34Speaker 06

  He never got over it, by the way. He spent the rest of his life lamenting that he got licked in this, his most important fight.

• 40:49Rund Abdelfatah?

  Coming up, health insurance in America reaches the point of no return.

• 41:04Speaker 00

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• 42:29Speaker 06

  Hi, this is Karata Klos from Health and Design. Thanks for the show. It's tremendously good. I've learned a huge amount of things. And you're listening to True Life from NPR.

• 42:44Speaker 00

  Part Three, The Trap.

• 42:48Speaker 06

  Eisenhower Answers America. The Democrats have made mistakes, but aren't their intentions good? Well, if the driver of your school bus runs into a truck, hits a lamppost, drives into a ditch, you don't say his intentions are good. You get a new bus driver.

• 43:07Rund Abdelfatah?

  I for President, I for President, I for President, I for President. You like Ike, I like Ike, everybody likes Ike. In 1953, Dwight D. Eisenhower was sworn in as the country's 34th president.

• 43:21Speaker 06

  Eisenhower takes the oath. Preserve, protect, and defend the Constitution of the United States. So help you God. So help me God. The Eisenhower administration comes in, the only Republican administration between 1932 and 1968. Long stretch of Democrats.

• 43:43Rund Abdelfatah?

  And this Republican interruption swooped in with a plan to distinguish itself, a plan that came to be called dynamic conservatism or modern republicanism, bringing reforms to everything from foreign relations to the economy to healthcare.

• 44:00Speaker 06

  Eisenhower knows that if they don't do private, government is going to act eventually. As he himself said, Americans will have health insurance, and it's our choice whether it be private or public.

• 44:14Rund Abdelfatah?

  And Eisenhower made his choice very clear: private.

• 44:21Speaker 06

  From the broadcast room of the White House in Washington, DC, we present President Dwight D. Eisenhower. Ladies and gentlemen, the President of the United States.

• 44:30Speaker 00

  After about a year in office, Eisenhower went on national television to explain his plan for healthcare in America, one rooted in a private system. And he made it clear that his vision was nothing like Truman's.

• 44:50Speaker 06

  I hope that none of us confuse social progress with socialism. The program for voluntary health insurance is one further step in achieving this objective in the American way. It is the logical alternative to socialized medicine.

• 45:08Speaker 00

  Keep in mind, all of this was going down during the Red Scare. So Eisenhower couched his health insurance agenda in the language of antisocialism.

• 45:19Speaker 06

  You have to recognize this as a great fight over national health insurance, a great fight over keeping health insurance private, and also a great moment of terror. Really, a completely unreasonable terror over communism.

• 45:36Speaker 00

  So the Republicans looked for ways to preserve this private system, one that was growing but still vulnerable. And they realized exactly what they needed to do to stabilize it.

• 45:49Speaker 06

  Eisenhower goes to Congress, and he says, you know this thing we did during World War II? Well, the IRS is now thinking to tax it.

• 45:58Rund Abdelfatah?

  Remember, in the 1940s, after FDR instituted wage and price controls and employers started offering health insurance to workers, the IRS decided to make private health insurance tax-free. But by the 1950s, after a decade of growth in the industry, the IRS was like, wait a minute. We made this tax-free? What were we thinking?

• 46:22Speaker 00

  So the IRS and the courts both started to chip away at the tax-exempt status.

• 46:28Speaker 06

  And the Eisenhower administration says, no, we are going to lock this into place.

• 46:39Speaker 06

  And the reason they locked it into place is to stop national health insurance. They knew Truman had blown it, and Truman couldn't get it through. But they also knew we were basically in a Democratic era. And they knew that at some point, the Democrats would try again. And so they tried to cut them off at the pass. So the Eisenhower administration, they came sashaying into Congress. It's really hysterical if you read the Congressional Record. And they said, we want to make this permanent. No taxes for employer-based health insurance.

• 47:12Rund Abdelfatah?

  Congress went for it. And with that, it was decided once and for all. Employer contributions to health insurance would be tax-free. And Jim Morone says this moment in the 1950s was even more significant than what happened during World War II because it made a temporary thing permanent.

• 47:34Speaker 06

  So that's the moment. Not when it happened casually during World War II, but when the Eisenhower people went to a reasonably conservative Congress, dominated by a coalition of Southern Democrats and Northern Republicans, and with the full acquiescence of the Northern Democrats, all of whom thought, yeah, it's a pretty good thing. And that was the moment Eisenhower locks the employer-based system into place.

• 48:06Rund Abdelfatah?

  This tax incentive clearly played a major role in strengthening employer-based insurance. But it wasn't solely responsible for the country moving in this direction. It was the force of the AMA. It was the power of the labor unions. And it was more than that. Embracing private insurance was in line with a larger cultural shift that was taking place, one that was led by the Republican Party in an effort to woo Americans back in a post-FDR world.

• 48:36Speaker 06

  They can't fight against the economy. It's the best economy in the history of America and the best economy in the world by far. And they can't fight against Social Security. It's too popular. So they create this idea, which kind of sticks in the 1950s, that Americans are the people of the private sector. As long as we keep the foundation of our business system strong, we shall be able to maintain and improve the way of life our forefathers conceived and established, a way of life which gave everyone who came to this country the chance to progress according to his ability and enterprise. If you're a white male in the 1950s, it sounds right.

• 49:20Speaker 06

  Like, yeah, yeah, I provide for my own family. And on this foundation of freedoms, continue to build a better life for themselves and their Fellow man in the world of tomorrow.

• 49:37Speaker 03

  If you're an African American, perhaps a hero coming back from World War II, that story would sound stupid, like a lie, crazy. Yes, it would. So notice that when people repeat this familiar story, they're repeating the great white male story of the 1950s.

• 49:58Speaker 04

  Whether you bought into it or not, the message was clear. The pathway to success was through the private sector, a private sector powered by jobs, jobs that were not only the pathway to your salary, but to your health insurance. And Eisenhower's health plan made sure that jobs were the primary way you received insurance. Well, certain jobs.

• 50:21Speaker 03

  Good jobs, not at the low end of the labor force, OK? Not for agricultural workers, not for restaurants and the service industry. They didn't get the benefit of this.

• 50:35Rund Abdelfatah?

  Elderly retired people were also left out.

• 50:39Speaker 04

  Enter JFK. He's elected president in 1960, and then his father has a stroke.

• 50:47Speaker 03

  And he can't believe it.

• 50:52Speaker 04

  In a speech not long after, Kennedy, half joking, said it was a good thing his father was richer than the president so he could afford his health care. And that joke touched on something deeper, a question that haunted him.

• 51:06Speaker 03

  What do ordinary people do?

• 51:10Speaker 03

  And Medicare went from, I don't really care about this. It's too complicated. I don't understand it, to an obsession with John F. Kennedy. He just had to have it. Well, he gets assassinated before he gets anywhere, and Lyndon Johnson picks it up. Johnson wants to pass everything that was on Kennedy's plate.

• 51:28Speaker 04

  And in March of 1965, Medicare passed.

• 51:33Speaker 03

  And he says, I'm flying out to Independence, Missouri, so I can sign this with Harry Truman there. And his staff says, no, no, no, no, no, that'll get the whole socialized medicine thing going all over again.

• 51:48Speaker 03

  And he said, I don't care.

• 51:50Speaker 06

  The Harry S. Truman Library at Independence, Missouri, is the scene of an historic event. President and Mrs. Johnson and Vice President Humphrey arrive for ceremonies that will make the Medicare bill a part of social security coverage.

• 52:04Speaker 03

  And there's Johnson. And as he signs, he's got his pen in his hand, and he turns to Truman, and he says, only you can understand my feelings as I sign this bill.

• 52:20Speaker 06

  Medicare will become law on July 1, 1966, and for Mr. Truman, an historic souvenir from the president.

• 52:28Speaker 03

  And then he hands Truman Medicare card number one.

• 52:33Speaker 06

  For Mr. Truman, the passage of Medicare is a dream come true.

• 52:42Rund Abdelfatah?

  Receiving Medicare card number one may have been a dream come true for Truman, but it wasn't his dream come true, not his full one, anyway. This wasn't a historic signing of a unified, universal program. This was piecemeal, just another piece of the puzzle that we're left with today.

• 53:01Speaker 03

  This is what happens when things unfold in sequence. And the failure to enact health insurance earlier led to the development of private employer-based insurance, and then private employer-based insurance led reformers to focus on the people who were not being covered by employers. So we have Medicare, and we have Medicaid, and we have the Children's Health Insurance Plan, and we kept trying to fill in all the gaps. But then it turns out, even with all these efforts to fill in the gaps, there's still millions of people who fall into the void and don't have any protection.

• 53:40Rund Abdelfatah?

  And because it's this one huge puzzle that everyone is trying to fit into, naturally, it's puzzling. And Paul Starr says the only thing worse than the confusion is the cost.

• 53:54Speaker 03

  The United States has by far the most expensive health care system in the world. So I think if we had gone down a different path, if we had enacted a system of national health insurance, we would be spending quite a bit less on health care than we do today.

• 54:14Speaker 02

  We've built a whole set of institutions that doesn't want this to happen. Not only private health insurance, but hospitals that get very high payments from private health insurance, they're not eager to have that go away. High-priced specialists, they don't want this to go away. So we've sort of entrenched a bunch of interests who were opposed to this.

• 54:35Speaker 03

  I think it could have turned out differently. It didn't have to be the way it is. There were these moments in the past, there were inflection points, there were turning points, where it could have gone in a different way. That is the basic structure of the past, this set of paths taken and paths not taken.

• 54:57Speaker 02

  We kind of wound up where we did because at various moments, we came close to where other countries wound up, but just didn't make it over the threshold.

• 55:08Rund Abdelfatah?

  In 2010, when the Affordable Care Act was signed into law by President Obama, it was the most significant expansion of health care in the US since the 1965 passing of Medicare and Medicaid. Even though premiums are set to rise significantly next year, the law has given coverage to over 40 million Americans and protected millions with pre-existing conditions from losing their insurance. But it has effectively reinforced a private-public hybrid system rather than the single, universal public safety net envisioned by Truman. In fact, Obamacare, as it's come to be known, actually borrowed less from Truman's vision

• 55:48Rund Abdelfatah?

  and much more from a plan secretly put together by Richard Nixon in 1974. We will establish a new system that makes high-quality health care available to every American in a dignified manner and at a price you can afford.

• 56:04Rund Abdelfatah?

  We'll have that story for you next week.

• 56:10Rund Abdelfatah?

  And that's it for today's show. Throughline was created by me and Ramtin Adebroui. This episode was produced by me and

• 56:17Speaker 06

  Jamie York. Lawrence Wu. Lane Kaplan-Levinson.

• 56:20Rund Abdelfatah?

  Julie Kane. Victoria Whitley Berry. Fact checking for this episode was done by Kevin Vogel. Thanks also to Camille Smiley, Anya Grunman, Lou Olkowski, and Molly Marcello. Our music was composed by Ramtin and his band, Drop Electric, which includes Naveed Marvi. Sho Fujiwara. Anya Mizani. And finally, if you have an idea or liked something you heard on the show, please write us at [email protected]. Thanks for listening.

• 56:57Speaker 00

  Stay tuned for the following announcements and messages from our sponsors. This message comes from Bombas. Still looking for the perfect gift? How about something soft, something plush, fluffy, maybe something sporty? How about cushy or grippy? Definitely something cozy. This holiday season, Bombas has something for everyone on your list, making the best version of your everyday go-tos, socks, slippers, shoes, and more. Visit B-O-M-B-A-S dot com slash NPR and use code NPR for 20% off your first purchase.

• 57:32Speaker 06

  This message comes from Midi Health. Most women never get real answers about their hormonal health. Midi is changing that with virtual care covered by most major insurances. Understand your hormones. Visit joinmidi.com to book your first visit today.