Health Insurance in America

Summary

Throughline: Health Insurance in America – Detailed Summary

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

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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.

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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].

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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]

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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].

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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]

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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]

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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.

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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]

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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]

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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.

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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]

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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.

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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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Subscribe and Support

To delve deeper into history-reframing and perspective-shifting stories, subscribe to Throughline+ for bonus episodes and sponsor-free listening. Support the show at plus.npr.org/throughline.

Transcript

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[Rund Abdelfatah]

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. u.S. Rows of beds line the walls of a large open room. We step over a small puddle of water, probably from that leak in the ceiling, and a few patients lie coughing in tattered clothes. For most Americans, this is the last place they'll want to come if they get sick.

[Sherry Glied]

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

[Paul Starr]

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

[Sherry Glied]

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.

[Ramtin Arablouei]

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.

[Rund 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.

[Ramtin Arablouei]

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

[Rund Abdelfatah]

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

[Ramtin Arablouei]

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

[Rund Abdelfatah]

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

[Liz]

Healthcare billing is complicated.

[Rund Abdelfatah]

Sticker prices of hundreds of medicines went up.

[Liz]

Some health care is unexpected, and it's expensive.

[Rund Abdelfatah]

Widespread consumer anger over denied claims and.

[Ramtin Arablouei]

The high costs of care.

[Progressive Insurance]

Most Americans have had at one time.

[Rund Abdelfatah]

Or another, a 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 health care. You're listening to Throughline from npr, where we go back in time to understand the present.

[Ramtin Arablouei]

Hey, I'm Ramtin Arablouei.

[Rund Abdelfatah]

And I'm Rund Abdelfatah.

[Ramtin Arablouei]

And on this episode, the cost of our health.

[Rund Abdelfatah]

As the Trump administration shakes up the federal Government. There's an open question about what all the changes might mean for the rising costs of health care. Healthcare spending makes up almost 20% of the U.S. economy.

[Ramtin Arablouei]

The United States has the most expensive health care system in the world, and it's one of the wealthiest countries without a universal health care system. That type of system would cover everyone. Instead, a majority of Americans depend on their jobs for health insurance.

[Rund Abdelfatah]

In this episode, we're going back to the moment we chose this path, when the US Faced some key decisions about health care and how to pay for it and came up with a temporary solution that created an everlasting problem.

[Jim Morone]

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

[Liz]

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[Progressive Insurance]

This message comes from Progressive Insurance. Do you ever find yourself playing the budgeting game? Well, with the name your price tool from Progressive, you can find options that fit your budget and potentially lower your bills. Try [e-mail] Progressive Casualty Insurance Company and affiliates Price and coverage match limited by state law. Not available in all states.

[Ramtin Arablouei]

Part one Cogs in the Wheel.

[Rund 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. 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. Its agrarian spirit had faded and industry was king.

[Ramtin Arablouei]

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.

[Sherry Glied]

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

[Ramtin Arablouei]

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

[Sherry Glied]

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.

[Rund Abdelfatah]

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

[Sherry Glied]

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

[Rund Abdelfatah]

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

[Sherry Glied]

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

[Paul Starr]

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

[Ramtin Arablouei]

1883.

[Paul Starr]

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

[Ramtin Arablouei]

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, the labor movement was.

[Paul Starr]

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.

[Rund Abdelfatah]

By the way, this is Paul Starr.

[Paul Starr]

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

[Ramtin Arablouei]

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

[Jim Morone]

Whatsoever house I enter there will I go for the benefit of the sake. And whatsoever I see or hear, I.

[Harry Truman]

Will leap on thereon.

[Rund Abdelfatah]

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

[Sherry Glied]

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 health care in the 1920s and hospitals start opening that are not killing people and people begin to use them.

[Jim Morone]

The young doctor joins a hospital staff. Here he is brought face to face with the realities of medicine and of life.

[Rund 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.

[Sherry Glied]

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.

[Paul Starr]

And pretty quickly the hospitals confronted a financial problem. Many of their patients couldn't pay when bills were due.

[Sherry Glied]

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.

[Paul Starr]

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

[Sherry Glied]

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

[Paul Starr]

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

[Rund 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 for Blue Cross.

[Ramtin Arablouei]

The biggest challenge was actually figuring out how to sell it.

[Sherry Glied]

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. And they realize 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.

[Ramtin Arablouei]

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

[Sherry Glied]

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

[Rund Abdelfatah]

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

[Paul Starr]

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

[Rund Abdelfatah]

Doctors visits weren't covered at all.

[Paul Starr]

The American Medical association was against third party payment. The doctors didn't want anybody butting into.

[Ramtin Arablouei]

Their domain, 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.

[Jim Morone]

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. Syphilis.

[Paul Starr]

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

[Ramtin Arablouei]

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

[Sherry Glied]

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

[Ramtin Arablouei]

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.

[Jim Morone]

This nation is asking for action, and action now.

[Ramtin Arablouei]

Nationalized health insurance.

[Jim Morone]

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.

[Rund Abdelfatah]

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

[Jim Morone]

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

[Rund Abdelfatah]

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

[Sherry Glied]

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

[Rund Abdelfatah]

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

[Harry Truman]

So 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.

[Ramtin Arablouei]

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

[Harry Truman]

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

[Ramtin Arablouei]

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

[Paul Starr]

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.

[Harry Truman]

Roosevelt, who was getting advice from a very famous physician who kept telling him, franklin, this is not going to work.

[Ramtin Arablouei]

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.

[Paul Starr]

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

[Jim Morone]

The government have made plans under which it will be possible to carry on the work of the nation. Days of stress and strain that may be a hit. America goes to war to save the homes and ideals of free men from Axis domination.

[Rund 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.

[Jim Morone]

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

[Rund 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.

[Jim Morone]

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

[Harry Truman]

The administration puts wage and price controls on the economy.

[Sherry Glied]

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.

[Ramtin Arablouei]

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, here are these.

[Sherry Glied]

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.

[Harry Truman]

And they hit upon this relatively unknown thing called health insurance. They said, come to work with us and we'll pay your health insurance.

[Ramtin Arablouei]

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.

[Harry Truman]

What's the IRS gonna do about health insurance?

[Ramtin Arablouei]

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

[Rund Abdelfatah]

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

[Sherry Glied]

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

[Harry Truman]

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

[Paul Starr]

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.

[Rund 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, employers were in.

[Paul Starr]

The best position of any non governmental organization to spread the cost of insurance and to manage it administratively.

[Ramtin Arablouei]

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

[Sherry Glied]

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

[Rund 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.

[Jim Morone]

Each hour in every 24 is filled with a steady drone of allied aircraft dominating the sky. Then ruin 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.

[Harry Truman]

Turned coming out of 1943, 1944. It's now clear the United States is going to win World War II. Roosevelt, who is about to hit his fourth term, is looking for another crusade to run.

[Rund 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.

[Paul Starr]

He had asked Samuel Rosenman to prepare a speech.

[Harry Truman]

He said, sam, write me a plan.

[Paul Starr]

About national health insurance.

[Rund 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.

[Harry Truman]

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.

[Jim Morone]

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.

[Harry Truman]

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. Seems to be 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.

[Ramtin Arablouei]

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.

[Harry Truman]

And to everyone's shock, Truman grasps this plan as his great mission in life. This comes from the grave, from the great man, and Truman makes it this thing of his career.

[Ramtin Arablouei]

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

[Harry Truman]

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.

[Ramtin Arablouei]

Non stop for the last 12 hours.

[Harry Truman]

And it is amazing. Thank you so much.

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[Harry Truman]

Part.

[Ramtin Arablouei]

2 Whose health care is it?

[Rund 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.

[Ramtin Arablouei]

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

[Paul Starr]

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

[Harry Truman]

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

[Jim Morone]

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

[Harry Truman]

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

[Rund 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.

[Sherry Glied]

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

[Ramtin Arablouei]

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

[Jim Morone]

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.

[Paul Starr]

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.

[Jim Morone]

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

[Paul Starr]

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.

[Harry Truman]

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

[Jim Morone]

With control of the Senate, a vital question. Both candidates will visit the states with the closest Senate races.

[Paul Starr]

So Truman needed something to rally the Democratic troops.

[Rund Abdelfatah]

And national health insurance became one of his rallying cries.

[Harry Truman]

Truman got on his train, went whistle.

[Jim Morone]

Stopping through a 16 day coast to coast tour lies ahead as the Truman special pulls out of Washington.

[Harry Truman]

He wasn't very good at speeches, but his staff discovered that if just give him a couple of talking points, he could really bang them out.

[Jim Morone]

Then he dashes to San Francisco here in two more major addresses.

[Harry Truman]

And many of them were about national health insurance. That and helping out labor.

[Ramtin Arablouei]

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.

[Rund Abdelfatah]

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

[Jim Morone]

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've won under a Democratic administration. Get out there on election day and.

[Harry Truman]

Vote for your future.

[Jim Morone]

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.

[Harry Truman]

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 national health insurance moment.

[Rund Abdelfatah]

But Truman's vision of universal health insurance faced an uphill battle. When it came time to pass actual legislation, there was opposition from American industries who were thriving and from unions who remember, could use health insurance as a bargaining chip with employers.

[Sherry Glied]

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.

[Ramtin Arablouei]

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 southern Democrats.

[Harry Truman]

Segregationists really pissed at Truman because he's pushing civil rights along with health care.

[Ramtin Arablouei]

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.

[Harry Truman]

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.

[Rund Abdelfatah]

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

[Harry Truman]

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

[Rund 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.

[Jim Morone]

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

[Ramtin Arablouei]

Meanwhile, the world was changing yet again.

[Jim Morone]

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

[Harry Truman]

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? The red scare.

[Jim Morone]

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

[Ramtin Arablouei]

This gave Truman's opponents even more ammunition.

[Paul Starr]

The opponents said that national health insurance was a communist idea, a pink idea, you know, a Soviet plot. And at that time, that kind of opposition, you know, was deadly.

[Ramtin Arablouei]

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.

[Harry Truman]

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

[Rund 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.

[Harry Truman]

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.

[Ramtin Arablouei]

It was just attacked after attack after attack on Truman.

[Harry Truman]

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. And he practically screamed at people who challenged that premise. He just thought they were living in the 19th century.

[Ramtin Arablouei]

And then the AMA turned up the heat.

[Paul Starr]

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

[Harry Truman]

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

[Rund Abdelfatah]

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

[Harry Truman]

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

[Rund 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 seems 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, it becomes more universally accepted. The majority will decide in the long run.

[Ramtin Arablouei]

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.

[Harry Truman]

Truman got shellacked. He just completely got defeated. 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 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. 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.

[Ramtin Arablouei]

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

[Harry Truman]

Hi, this is Karatek Kalakshu from Health and Consistent. Thanks for the show.

[Jim Morone]

It's tremendously good.

[Harry Truman]

I've learned a huge amount of things.

[Jim Morone]

And you're listening through life from npr.

[Progressive Insurance]

Support for NPR and the following message come from Boll and Branch. Change your sleep with the softness of Bolen Branch's 100% organic cotton sheets. Feel the difference with 15% off your first set of [e-mail] with code NPR exclusions apply. See site for details. This message comes from Bombas. Their slippers are designed with cushioning so every step feels marshmallowy Soft plus for every item purchased Bombas donates to someone in need. Go to bombas.com NPR and use code NPR for 20% off your first order.

[Jim Morone]

Part 3 the Trap 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. I for President. I for President. I for President.

[Harry Truman]

I for president.

[Jim Morone]

You like Ike? I like Ike. Everybody likes Ike for president.

[Rund Abdelfatah]

In 1953, Dwight D. Eisenhower was sworn in as the country's 34th president.

[Jim Morone]

Eisenhower takes the oath. Preserve, protect and defend the Constitution of the United States. So help you God. So help me God.

[Harry Truman]

The Eisenhower administration comes in. The only Republican administration between 1932 and 1968. Long stretch of Democrats and this Republican.

[Rund Abdelfatah]

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 health care.

[Harry Truman]

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.

[Rund Abdelfatah]

And Eisenhower made his choice very clear. Private.

[Jim Morone]

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

[Ramtin Arablouei]

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

[Jim Morone]

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.

[Ramtin Arablouei]

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

[Harry Truman]

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.

[Ramtin Arablouei]

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.

[Harry Truman]

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.

[Rund 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?

[Ramtin Arablouei]

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

[Harry Truman]

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

[Rund 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 Marone says this moment in the 1950s was even more significant than what happened during World War II because it made a temporary thing permanent.

[Harry Truman]

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, that's a pretty good thing. And that was the moment Eisenhower locks the employer based system into place.

[Rund 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.

[Harry Truman]

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.

[Jim Morone]

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.

[Harry Truman]

If you're a white male in the 1950s, it sounds right, like, yeah, yeah, I, I provide for my own Family.

[Jim Morone]

And on this foundation of freedoms continue to build a better life for themselves and their fellow man in the world of tomorrow.

[Harry Truman]

If you were 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.

[Ramtin Arablouei]

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, good jobs.

[Paul Starr]

Not at the low end of the labor force. Okay? Not for, like, agricultural workers, not for, you know, restaurants and service industry. They. They didn't get the benefit of this.

[Rund Abdelfatah]

Elderly, retired people were also Left out.

[Ramtin Arablouei]

Enter JFK. He's elected president in 1960, and then his father has a stroke, and he can't believe it. 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.

[Harry Truman]

What do ordinary people do? 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.

[Ramtin Arablouei]

And In March of 1965, Medicare passed.

[Harry Truman]

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, no. That'll get the whole socialized medicine thing going all over again. And he said, I don't care.

[Jim Morone]

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.

[Harry Truman]

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 signed this bill.

[Jim Morone]

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

[Harry Truman]

And then he hands Truman Medicare card number one.

[Jim Morone]

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

[Rund Abdelfatah]

Receiving Medicare card number 1 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.

[Paul Starr]

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. We have Medicare and we have Medicaid and we have the children's health insurance plan. And, 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.

[Rund 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.

[Paul Starr]

The United States has by far the most expensive healthcare system in the world. So, you know, 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.

[Sherry Glied]

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 are opposed to this.

[Paul Starr]

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.

[Harry Truman]

That is the basic structure of the past. This set of paths taken and paths not taken.

[Sherry Glied]

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.

[Paul Starr]

So although I might wish that there could be some sudden measure that would totally transform things, I don't expect that. What we've actually seen historically is that every time a really big proposal comes up, it gets defeated. Maybe I'm underestimating the demand for change. Maybe something bigger is possible. We could make different choices now.

[Rund Abdelfatah]

That's it for this week's show. I'm Rund Abdelfatah.

[Ramtin Arablouei]

I'm Ramtin Ad Abloui and you've been listening to Throughline from npr.

[Rund Abdelfatah]

This episode was produced by me and.

[Ramtin Arablouei]

Me and Jamie Yorke, Lawrence Wu, Lane.

[Rund Abdelfatah]

Kaplan Levinson, Julie Kane, Victoria Whitley Berry. Fact checking for this episode was done by Kevin Voelkel.

[Ramtin Arablouei]

Thanks also to Camille Smiley and Anya Grundmann.

[Rund Abdelfatah]

Our music was composed by Ramtin and his band Drop Electric, which includes Naveed.

[Harry Truman]

Marvi, Sho Fujiwara, Anya Mizani.

[Ramtin Arablouei]

If you have an idea or you like something on the show, please write [e-mail] thanks for listening.

[Progressive Insurance]

This message comes from Mint Mobile Mint Mobile took what's wrong with wireless and made it right. They offer premium wireless plans for less and all plans include high speed data, unlimited talk and text and nationwide coverage. See for [e-mail] Switch this message comes from Bombas. Their socks are super plush, designed to support your arches and support people in need. One purchase equals one donated to those experiencing homelessness. Go to bombas.com NPR and use code NPR for 20% off your first order. This message comes from Mint Mobile. If you're tired of spending hundreds on big wireless bills, bogus fees and free perks, Mint Mobile might be right for you with plans starting from 15 bucks a month. Shop plans [e-mail] Switch upfront payment of $45 for 3 month 5GB plan required. New customer offer for first 3 months only, then full price plan options available, taxes and fees extra. See Mint Mobile for details.