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America’s Rejection of Compulsory Government Health Insurance in the Progressive Era and its Legacy for National Insurance Today

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Herbert Emery

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Abstract

Between 1915 and 1920, 18 U.S. states considered the introduction of compulsory health insurance. Given the alleged deficiencies of voluntary arrangements for insuring sickness, reformers expected social insurance to be welfare enhancing for American wage-workers since it would result in lower cost insurance and an extension of coverage to more of the population. Scholars commonly ascribe the inability of states to introduce government health insurance to American ideology and institutions that prevented the political mobilization of wage-workers. They view the lack of government insurance as a policy failure and significant for explaining why the U.S. does not have national health insurance today. The evidence presented in this paper casts doubt on this interpretation. Compulsory insurance would not have provided gains for wage-workers, and this explains the absence of broad political support for health insurance legislation in this early period.

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Paper provided by Department of Economics, University of Calgary in its series Working Papers with number 2008-23.

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Date of creation: 01 Jan 2008
Date of revision: 01 Jan 2008
Handle: RePEc:clg:wpaper:2008-23

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Find related papers by JEL classification:
H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
I38 - Health, Education, and Welfare - - Welfare and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
N3 - Economic History - - Labor and Consumers, Demography, Education, Income, and Wealth
N4 - Economic History - - Government, War, Law, and Regulation

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  1. Weaver, Carolyn L., 1983. "On the lack of a political market for compulsory old-age insurance prior to the great depression: Insights from economic theories of government," Explorations in Economic History, Elsevier, vol. 20(3), pages 294-328, July. [Downloadable!] (restricted)
  2. Ehrlich, Isaac & Becker, Gary S, 1972. "Market Insurance, Self-Insurance, and Self-Protection," Journal of Political Economy, University of Chicago Press, vol. 80(4), pages 623-48, July-Aug.. [Downloadable!] (restricted)
  3. Thomasson, Melissa A., 2002. "From Sickness to Health: The Twentieth-Century Development of U.S. Health Insurance," Explorations in Economic History, Elsevier, vol. 39(3), pages 233-253, July. [Downloadable!] (restricted)
  4. Peter Lindert, 2004. "Social Spending and Economic Growth," Challenge, M.E. Sharpe, Inc., vol. 47(4), pages 6-16, July. [Downloadable!] (restricted)
  5. Kantor, Shawn Everett & Fishback, Price V, 1996. "Precautionary Saving, Insurance, and the Origins of Workers' Compensation," Journal of Political Economy, University of Chicago Press, vol. 104(2), pages 419-42, April. [Downloadable!] (restricted)
  6. Horrell, Sara & Oxley, Deborah, 2000. "Work and prudence: Household responses to income variation in nineteenth-century Britain," European Review of Economic History, Cambridge University Press, vol. 4(01), pages 27-57, April. [Downloadable!]
  7. Davis, Karen, 1989. "National Health Insurance: A Proposal," American Economic Review, American Economic Association, vol. 79(2), pages 349-52, May. [Downloadable!] (restricted)
  8. Dora L. Costa, 1995. "The Political Economy of State Provided Health Insurance in the Progressive Era: Evidence from California," NBER Working Papers 5328, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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