Throughline: Health Insurance in America – Detailed Summary

Episode Released: February 27, 2025 | Hosts: Rund Abdelfatah and Ramtin Arablouei | Produced by NPR

Introduction: Setting the Stage for American Healthcare

In this compelling episode of Throughline, NPR’s Rund Abdelfatah and Ramtin Arablouei embark on a historical journey to unravel the complexities of the American health insurance system. Through engaging narratives and expert insights, they explore how past decisions and pivotal moments have shaped the current landscape of healthcare in the United States—a system often criticized for its high costs and significant coverage gaps.

1. Early Healthcare in America: A Grim Beginning

The story begins in the mid-1800s, painting a stark image of American hospitals:

"Imagine for a moment it's the mid-1800s. We're walking down a long, dimly lit corridor of a hospital in the U.S."
— Rund Abdelfatah [00:40]

During this era, hospitals were rudimentary and far from the advanced institutions we recognize today. Sherry Glied, Dean of the Robert F. Wagner Graduate School of Public Service at NYU, provides a bleak perspective:

"A hospital was a place where poor people, people went to die."
— Sherry Glied [01:24]

Medical practices were primitive, with treatments like mercury administration and bloodletting being common and often harmful:

"At the time, doctors are still giving patients mercury... and bloodletting to help balance the body."
— Ramtin Arablouei [01:43]

The average life expectancy hovered around 40 years, and over 30% of children did not survive to their fifth birthday [02:09-02:17].

2. The Birth of Sickness Insurance and Early Models

As the United States industrialized in the late 18th and early 19th centuries, the traditional agrarian lifestyle gave way to urban factory jobs. This shift introduced new challenges:

"In this brave new world, industrial workers weren't their own bosses... they were sort of cogs in a wheel."
— Ramtin Arablouei [07:13]

Sherry Glied explains the financial vulnerability of factory workers:

"The financial consequence of sickness was not the cost of paying your medical bills... but really the cost of continuing to put food on the table when you were sick."
— Sherry Glied [08:24]

In response, sickness insurance emerged as a form of disability insurance, providing financial support to workers injured on the job. By 1915, these funds covered around 8 million workers [08:29-08:45].

Meanwhile, internationally, Germany was ahead in health insurance implementation:

"The first country to introduce compulsory health insurance... was Germany in 1883."
— Paul Starr [08:52]

3. Franklin D. Roosevelt’s Social Security and the Push for Health Insurance

Facing the Great Depression, President Franklin D. Roosevelt sought comprehensive social welfare reforms. Rund Abdelfatah sets the context:

"President Franklin D. Roosevelt was facing the worst economic crisis in American history."
— Rund Abdelfatah [15:07]

Roosevelt aimed to incorporate national health insurance into the Social Security Act, envisioning a safety net for all Americans. However, fierce opposition from the American Medical Association (AMA) derailed these efforts:

"The American Medical association was very well organized in those days... the largest association of physicians in the country."
— Paul Starr [16:49-16:55]

Ultimately, Roosevelt removed health insurance from the bill to ensure the passage of other social welfare programs, a decision that would have lasting repercussions [15:57-17:36].

4. World War II and the Rise of Employer-Based Insurance

The onset of World War II brought economic transformations. With wage and price controls in place, employers sought innovative ways to attract workers without raising wages. Sherry Glied elaborates:

"Employers who want to attract workers to their firms... decide to start offering people benefits that won't violate the wage and price control rules..."
— Sherry Glied [19:47-20:15]

This led to the proliferation of employer-sponsored health insurance. The IRS’s decision to make employer contributions to health insurance tax-free further entrenched this model:

"The IRS decided not to tax this new employee sponsored health insurance, making it a lot cheaper for employers."
— Ramtin Arablouei [20:39]

Jim Morone highlights the unintended consequences:

"During World War II, the United States got the roots of a private insurance system."
— Jim Morone [21:14]

5. Truman’s Efforts and the AMA’s Campaign Against National Health Insurance

Following Roosevelt’s death, President Harry Truman took up the cause of universal health insurance. Determined to implement national health insurance, Truman embarked on a nationwide campaign. However, the AMA launched a formidable advertising and lobbying offensive portraying the initiative as socialism:

"They inundated Congress with letters, with advertisements... saying, the private way is the American way."
— Rund Abdelfatah [37:04]

Despite Truman’s passionate advocacy, the opposition proved overwhelming. The AMA’s extensive campaign effectively swayed public opinion and Congress against the bill:

"Truman got shellacked. He just completely got defeated... he spent the rest of his life lamenting that he got licked in this, his most important fight."
— Harry Truman [40:32]

6. Eisenhower’s Administration and the Solidification of Employer-Based Insurance

President Dwight D. Eisenhower, inaugurated in 1953, capitalized on Truman’s defeat by solidifying the employer-based insurance model. Recognizing the growing private insurance industry, Eisenhower sought to lock in the tax-exempt status permanently:

"With that, it was decided once and for all employer contributions to health insurance would be tax free."
— Rund Abdelfatah [46:57]

This strategic move ensured the dominance of private, employer-sponsored health insurance, making it the cornerstone of American healthcare.

7. Medicare and Medicaid: Addressing Coverage Gaps

In the 1960s, under President Lyndon B. Johnson, Medicare and Medicaid were established to extend healthcare coverage to the elderly and the poor, respectively. This marked significant progress but maintained a patchwork system rather than achieving universal coverage:

"Medicare would become law on July 1, 1966... receiving Medicare card number 1 may have been a dream come true for Truman."
— Jim Morone [51:12-52:26]

8. Modern Healthcare Challenges: Cost and Coverage Gaps

Today, the American healthcare system remains the most expensive in the world, burdened by high costs and persistent coverage gaps. Paul Starr reflects on missed opportunities:

"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."
— Paul Starr [53:38]

Sherry Glied emphasizes the entrenched interests that resist change:

"We've built a whole set of institutions that doesn't want this to happen... high-priced specialists, they don't want this to go away."
— Sherry Glied [54:19]

Conclusion: Reflecting on Paths Not Taken and Future Possibilities

The episode concludes by pondering how different historical choices could have led to a more universal and cost-effective healthcare system. Paul Starr muses:

"I think it could have turned out differently. It didn't have to be the way it is."
— Paul Starr [54:34]

Rund Abdelfatah and Ramtin Arablouei underscore that the current system is the result of numerous historical developments, leaving room for future reforms and innovations.

Notable Quotes with Timestamps

• "A hospital was a place where poor people, people went to die."
  — Sherry Glied [01:24]

• "They inundated Congress with letters, with advertisements... saying, the private way is the American way."
  — Rund Abdelfatah [37:04]

• "Truman got shellacked. He just completely got defeated... he spent the rest of his life lamenting that he got licked in this, his most important fight."
  — Harry Truman [40:32]

• "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."
  — Paul Starr [53:38]

Final Thoughts: Understanding Today’s Healthcare Through History

Throughline’s exploration provides a nuanced understanding of why the American healthcare system operates as it does today. By tracing the evolution from rudimentary hospitals to the entrenched employer-based insurance model, the episode highlights the interplay of economic forces, political battles, and societal values that have shaped healthcare policy in the United States. As Rund Abdelfatah aptly concludes:

"That is the basic structure of the past. This set of paths taken and paths not taken."
— Sherry Glied [54:42]

This historical perspective serves as a foundation for contemplating future reforms and addressing the persistent challenges within American healthcare.

Credits

This episode was produced by Rund Abdelfatah and Ramtin Arablouei, with contributions from Jamie Yorke, Lawrence Wu, Lane Kaplan Levinson, Julie Kane, and Victoria Whitley Berry. Fact-checking was performed by Kevin Voelkel, with additional support from Camille Smiley and Anya Grundmann. Music was composed by Ramtin and his band, Drop Electric.

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