Health Insurance : Throughline Health insurance for millions of Americans is dependent on their jobs. But it's not like that everywhere. So, how did the U.S. end up with such a fragile system that leaves so many vulnerable or with no health insurance at all? On this episode, how a temporary solution created an everlasting problem.
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The Everlasting Problem

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The Everlasting Problem

The Everlasting Problem

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(SOUNDBITE OF MUSIC)

RUND ABDELFATAH, HOST:

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

(SOUNDBITE OF LIGHTBULB BUZZING)

ABDELFATAH: We're walking down a long, dimly lit corridor of a hospital in the U.S.

(SOUNDBITE OF FOOTSTEPS)

ABDELFATAH: 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.

(SOUNDBITE OF PEOPLE COUGHING)

ABDELFATAH: 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.

(SOUNDBITE OF MUSIC)

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

PAUL STARR: Hospitals were - they were not high-tech places by any means.

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, HOST:

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.

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.

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

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

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.

ABDELFATAH: But change is happening across society. And before long, health care in the U.S. will look radically different.

(SOUNDBITE OF MONTAGE)

UNIDENTIFIED REPORTER #1: Two-thirds of all bankruptcies in the U.S. are tied to medical debt.

UNIDENTIFIED REPORTER #2: Of the roughly 330 million Americans, just over 73% have some form of private medical insurance through their employer.

UNIDENTIFIED REPORTER #3: Alone among developed countries, the U.S.'s health care system isn't universal but run by for-profit health insurance companies.

UNIDENTIFIED REPORTER #2: Which leaves about 30 million people - 9% of the population - with no medical insurance at all.

(SOUNDBITE OF MUSIC)

ABDELFATAH: You're listening to THROUGHLINE from NPR.

ARABLOUEI: Where we go back in time...

ABDELFATAH: To understand the present.

ARABLOUEI: Hey. I'm Ramtin Arablouei.

ABDELFATAH: I'm Rund Abdelfatah.

ARABLOUEI: And on this episode, the cost of our health.

(SOUNDBITE OF MUSIC)

ARABLOUEI: Health care and how we pay for it is one of the most contentious topics in American politics these days. In any election, it would be a big issue. But given what we're in the middle of right now - a pandemic - it's become even more urgent.

ABDELFATAH: After all, most Americans depend on their jobs for their health insurance. And right now both jobs and health are at risk.

ARABLOUEI: Between February and May of this year, 5.4 million American workers lost their health insurance.

ABDELFATAH: Many people are asking why employer-based health insurance continues to be the path to health care for most Americans and how the U.S. ended up with this system in the first place.

ARABLOUEI: Especially when many other developed countries like Britain, Canada, Germany and Japan have a different system - a universal system which covers all people regardless of their employment.

ABDELFATAH: So in this episode, we're digging into those questions by going back to the moment when the U.S. 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.

(SOUNDBITE OF MUSIC)

LEIGH: Hi. This is Leigh (ph) from France, and you are listening to THROUGHLINE on NPR. Thank you.

UNIDENTIFIED PERSON #1: Part 1 - Cogs in the Wheel.

(SOUNDBITE OF ENGINE CHURNING)

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 U.S. was changed.

(SOUNDBITE OF ENGINE CHURNING)

ABDELFATAH: Its agrarian spirit had faded, and industry was king.

(SOUNDBITE OF MUSIC)

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.

(SOUNDBITE OF MUSIC)

GLIED: 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...

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

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.

(SOUNDBITE OF MUSIC)

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

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.

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

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

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.

ARABLOUEI: 1883.

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

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.

STARR: 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.

ABDELFATAH: By the way, this is Paul Starr.

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

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

(SOUNDBITE OF FILM, "MEN OF MEDICINE")

UNIDENTIFIED GROUP: Whatsoever house I enter, there will I go for the benefit of the sick. And whatsoever I see or hear, I will keep silent thereon.

(SOUNDBITE OF MUSIC)

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.

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

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED PERSON #2: The young doctor joins a hospital staff. Here he is brought face to face with the realities of medicine and of life.

(SOUNDBITE OF BABY CRYING)

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 U.S. was about 54 years, almost a decade longer than it had been in 1900.

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.

(SOUNDBITE OF MUSIC)

ABDELFATAH: And pretty quickly...

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

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. So...

STARR: Why not establish a program to get people to prepay for their hospital care?

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

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

(SOUNDBITE OF MUSIC)

ABDELFATAH: Private medical insurance started in the U.S. 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.

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

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.

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

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

(SOUNDBITE OF MUSIC)

ABDELFATAH: But it was still available to very few people relative to the general population, and these original plans were limited.

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

ABDELFATAH: Doctors visits weren't covered at all.

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

ARABLOUEI: 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".

(SOUNDBITE OF FILM, "MEN OF MEDICINE")

UNIDENTIFIED PERSON #3: 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...

STARR: The American Medical Association was very well-organized in those days. It was the single most powerful group in the whole health care arena.

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

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

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.

(SOUNDBITE OF ARCHIVED RECORDING)

FRANKLIN ROOSEVELT: This nation is asking for action and action now.

(APPLAUSE)

ARABLOUEI: Nationalized health insurance.

(SOUNDBITE OF ARCHIVED RECORDING)

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

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

(SOUNDBITE OF ARCHIVED RECORDING)

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

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

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

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

JIM MORONE: 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.

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

MORONE: 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.

(SOUNDBITE OF MUSIC)

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

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

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.

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

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.

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

(SOUNDBITE OF MONTAGE)

BENITO MUSSOLINI: (Speaking Italian).

HIDEKI TOJO: (Speaking Japanese).

NEVILLE CHAMBERLAIN: The government have made plans...

MUSSOLINI: (Speaking Italian).

CHAMBERLAIN: ...Under which it will be possible to carry on the work of the nation...

HIDEKI: (Speaking Japanese).

CHAMBERLAIN: ...In the days of stress and strain that may be ahead.

HIDEKI: (Speaking Japanese).

MUSSOLINI: (Speaking Italian).

(SOUNDBITE OF GUNFIRE)

UNIDENTIFIED REPORTER #4: America goes to war to save the homes and ideals of free men from Axis domination.

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

(SOUNDBITE OF ARCHIVED RECORDING)

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

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.

(SOUNDBITE OF ARCHIVED RECORDING)

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

STARR: The administration puts wage and price controls on the economy.

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...

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

GLIED: 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 wage and price control rules but that will be attractive and get people to come to their workplaces.

MORONE: 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.

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.

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

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

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

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

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

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.

ABDELFATAH: OK. 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...

STARR: Employers were in the best position of any non-governmental organization to spread the cost of insurance and to manage it administratively.

ARABLOUEI: 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.

GLIED: 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.

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 U.S. would continue down that road.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED REPORTER #5: 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...

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

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 adviser, Samuel Rosenman.

STARR: He had asked Samuel Rosenman to prepare a speech...

MORONE: He said, Sam, write me a plan.

STARR: ...About national health insurance.

ABDELFATAH: Only about 10% of the U.S. 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.

MORONE: 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.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED REPORTER #6: From his beloved second home at Warm Springs, Ga., the body of Franklin Delano Roosevelt moves on the first stages of a journey to his final resting place.

MORONE: 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 had barely even met Roosevelt - they'd just put him on the ticket. He's a senator from Missouri, 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've ever prayed for anyone, pray for me now.

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

MORONE: 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.

(SOUNDBITE OF MUSIC)

ARABLOUEI: Truman wages a battle for universal health insurance - when we come back.

(SOUNDBITE OF MUSIC)

JONATHAN: Hi, my name is Jonathan (ph), 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.

(SOUNDBITE OF BELL TOLLING)

UNIDENTIFIED PERSON #1: Part 2 - Whose Health Care Is It?

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.

ARABLOUEI: Thing is, in the aftermath of World War II, Western Europe and the U.S. looked very, very different.

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

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

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED REPORTER #7: Twenty million unfortunate children of Europe are waiting and hoping for a life that has brighter things to offer than unending hunger and sadness.

(SOUNDBITE OF MUSIC)

MORONE: 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.

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.

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.

(SOUNDBITE OF MUSIC)

ARABLOUEI: 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.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED REPORTER #8: 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.

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.

(SOUNDBITE OF ARCHIVED RECORDING)

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

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.

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

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED REPORTER #9: With control of the Senate a vital question, both candidates will visit the states with the closest Senate races. And with..

STARR: So Truman needed something to rally the Democratic troops.

ABDELFATAH: And National Health Insurance became one of his rallying cries.

(SOUNDBITE OF TRAIN WHISTLE)

MORONE: Truman got on his train, went whistle-stopping through.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED REPORTER #10: A 16-day coast-to-coast tour lies ahead as the Truman Special pulls out of Washington.

MORONE: 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.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED REPORTER #10: Then he dashes to San Francisco. Here, in two more more major addresses...

MORONE: And many of them were about national health insurance - that and helping out labor.

(SOUNDBITE OF MUSIC)

ARABLOUEI: Truman recognized something important - health care 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.

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 wealthy people could pay out of pocket, the middle class was largely left out. So national health insurance was their way in.

(SOUNDBITE OF MONTAGE)

TRUMAN: I'm not asking you just to vote for me. Vote for yourselves. Vote for farm. Vote for the standard of living that you've won under a Democratic administration. Get out on Election Day, and vote for your future.

(APPLAUSE)

UNIDENTIFIED REPORTER #11: 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.

MORONE: 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.

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

(SOUNDBITE OF MUSIC)

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.

GLIED: The U.S. 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.

(SOUNDBITE OF MUSIC)

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

MORONE: Southern Democrats, segregationists, really pissed at Truman because he's pushing civil rights along with health care...

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 this plan.

MORONE: 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.

(SOUNDBITE OF MUSIC)

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

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

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.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED PERSON #4: In recognizing a communist, physical appearance counts for nothing. If he openly declares himself to be a communist, we take his word for it.

ARABLOUEI: Meanwhile, the world was changing yet again.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED PERSON #4: If a person consistently reads and advocates the views expressed in a communist publication, he may be a communist.

MORONE: 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.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED PERSON #4: If a person does all these things over a period of time, he must be a communist.

(SOUNDBITE OF MUSIC)

ARABLOUEI: This gave Truman's opponents even more ammunition.

(SOUNDBITE OF MUSIC)

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

(SOUNDBITE OF MUSIC)

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

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.

(SOUNDBITE OF MUSIC)

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

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. The AMA paid the firm the equivalent of an almost $1 million retainer and a budget of around $10 million per year today. And they asked them to pull out all the stops to defeat Truman's health care plan.

(SOUNDBITE OF MUSIC)

MORONE: 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.

ARABLOUEI: It was just attack after attack after attack on Truman.

MORONE: 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 everybody 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.

(SOUNDBITE OF MUSIC)

ARABLOUEI: And then the AMA turned up the heat.

STARR: It got other organizations on board, other health care groups, various employer groups. It recruited just an overwhelming army of support.

MORONE: And meanwhile, the AMA ran these advertisements that had a 19th-century picture by a painter named Luke Fildes 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.

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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.

MORONE: 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.

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

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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.

MORONE: 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 'cause 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.

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MORONE: 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.

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ARABLOUEI: When we come back, health insurance in America reaches the point of no return.

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CARL DE KLAUS: Hi, this is Carl De Klaus (ph) from Helsinki, Finland. Thanks for the show. It's tremendously good. I've learned a huge amount of things. And you're listening to THROUGHLINE from NPR.

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UNIDENTIFIED PERSON #1: Part 3 - The Trap.

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UNIDENTIFIED PERSON #5: Eisenhower answers America.

UNIDENTIFIED PERSON #6: But Democrats have made mistakes. But aren't their intentions good?

DWIGHT D EISENHOWER: 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.

UNIDENTIFIED SINGERS: (Singing) Ike for for president. Ike for president. Ike for president. Ike for president. You like Ike. I like Ike. Everybody likes Ike for president.

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

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UNIDENTIFIED PERSON #7: Eisenhower takes the oath.

FRED M VINSON: ...Preserve, protect and defend the Constitution of the United States, so help you God.

EISENHOWER: So help me God.

MORONE: The Eisenhower administration comes in, the only Republican administration between 1932 in 1968 - long stretch of Democrats.

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 health care.

MORONE: 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.

ABDELFATAH: And Eisenhower made his choice very clear - private.

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UNIDENTIFIED PERSON #8: 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.

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.

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EISENHOWER: 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.

ABDELFATAH: 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.

MORONE: 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.

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.

MORONE: 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.

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?

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

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

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MORONE: 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 say, we want to make this permanent - no taxes for employer-based health insurance.

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.

MORONE: 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, this is a pretty good thing. And that was the moment Eisenhower locks the employer-based system into place.

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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.

MORONE: 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.

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UNIDENTIFIED PERSON #9: 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.

MORONE: If you're a white male in the 1950s, it sounds right. Like, yeah, yeah, I provide for my own family.

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UNIDENTIFIED PERSON #9: ...And on this foundation of freedoms, continue to build a better life for themselves and their fellow man in the world of tomorrow.

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MORONE: 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.

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.

STARR: Good jobs, not at the low end of the labor force, OK? Not for, like, agricultural workers, not for, you know, restaurants and the service industry - they didn't get the benefit of this.

ABDELFATAH: Elderly retired people were also left out.

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

MORONE: And he can't believe it.

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ARABLOUEI: 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.

MORONE: 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.

ARABLOUEI: And in March of 1965, Medicare passed.

MORONE: And he says, I'm flying out to Independence, Mo., 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.

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UNIDENTIFIED REPORTER #12: The Harry S. Truman Library at Independence, Mo., 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.

MORONE: 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.

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UNIDENTIFIED REPORTER #12: Medicare will become law on July 1, 1966. And for Mr. Truman, an historic souvenir from the president...

MORONE: And then he hands Truman Medicare card No. 1.

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UNIDENTIFIED REPORTER #12: For Mr. Truman, the passage of Medicare is a dream come true.

ABDELFATAH: Receiving Medicare card No. 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.

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. So we have Medicare, and we have Medicaid, and we have the Children's Health Insurance Plan. And we kept - we kept trying to fill in all the gaps. But then, it turns out, you know, 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.

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.

STARR: The United States has by far the most expensive health care 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.

GLIED: We've built a whole set of institutions that doesn't want this to happen, not only private health insurance but, you know, 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 - we've sort of entrenched a bunch of interests who are opposed to this.

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 that were inflection points, that were turning points where it could have gone in a, you know - in a different way.

MORONE: That is the basic structure of the past, this set of paths taken and paths not taken.

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.

STARR: So although I might wish, you know, 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...

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STARR: ...Although, you know, this pandemic is, I think, bringing out such serious problems with the way health care and public health work in this country, you know, that maybe I'm underestimating the demand for change.

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STARR: Maybe something bigger is possible. We could make different choices now.

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

ARABLOUEI: I'm Ramtin Arablouei. And you've been listening to THROUGHLINE from NPR.

ABDELFATAH: This episode was produced by me.

ARABLOUEI: And me. And...

JAMIE YORK, BYLINE: Jamie York.

LAWRENCE WU, BYLINE: Lawrence Wu.

LAINE KAPLAN-LEVENSON, BYLINE: Laine Kaplan-Levenson.

JULIE CAINE, BYLINE: Julie Caine.

VICTORIA WHITLEY-BERRY, BYLINE: Victoria Whitley-Berry.

ABDELFATAH: Fact-checking for this episode was done by Kevin Volkl.

ARABLOUEI: Thanks also to Camille Smiley and Anya Grundmann.

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

NAVID MARVI: Navid Marvi.

SHO FUJIWARA: Sho Fujiwara.

ANYA MIZANI: Anya Mizani.

ARABLOUEI: If you have an idea or you like something on the show, please write us at throughline@npr.org, or find us on Twitter at @throughlinenpr.

ABDELFATAH: Thanks for listening.

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