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Committee on the Costs of Medical Care forms to study the economic organization of medical care. The group is comprised of economists, physicians, public health specialists, and other major interest groups. Recommendations were completed by 1932 (Kaiser Family Foundation [KFF], 2013).
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Dr. Michael Abraham Shahid, a Lebanese immigrant, established a rural farmer’s cooperative health plan in Elk City, OK. Participating farmers purchased shares for $50 each to raise capital for a new hospital; in return they received discounted medical care. What is known as the Farmers’ Union Cooperative Health Association is considered to be the pioneering health maintenance organization (Fox, & Kongstvedt, 2007, p. 2).
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Baylor Hospital in Dallas starts a prepaid program with a local teaching union to create what is thought to be the nation’s first example of modern health insurance. Dallas teachers pay 50 cents a month to cover up to 21 days of hospital care per year. The plan grows into Blue Cross. (Goodridge & Arnquist, 2010; The Associated Press, 2012).
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Dr. Ray Lyman Wilbur, the interior secretary, reports results of a five-year national study which estimates that the average family spends $5 per week or $250 a year on health care (The New York Times, 1931).
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The Wilbur Commission finds that adequate medical attention is beyond the reach of millions of Americans and recommends that group medical practices and group repayment systems be expanded to spread financial risk. Critics, chiefly the American Medical Association (AMA), denounce the recommendations as “socialist” (Goodridge & Arnquist, 2010).
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America’s first “Blue Cross Baby” was born in Durham, North Carolina. The entire cost of her delivery and her mother’s 10-day hospital stay totaled $60. Ann Woodard Reid’s birth was the first in America to be covered by a health insurance family certificate that included maternity benefits (Blue Cross and Blue Shield Association [BCBS], 2013).
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Roosevelt signs the Social Security Act, originally designed to provide economic security during the Depression, to aid the jobless, elderly and children and grants to the states to provide various forms of medical care; creating a system to provide financial benefits to retired workers in commerce/industry, except railroad workers, ages 65 or older. A payroll tax, which becomes the Federal Insurance Contribution Act (FICA), starts at 2% pay for the program (Annenberg, n.d.; SSA, 2013).
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Under the provisions of the Federal Old-Age Benefits workers built up rights to payment of regular monthly benefits beginning at age 65 in proportion to the wages they earned prior to that time (U.S. Social Security Administration [SSA-AJA], 2012).
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Early insurance plans advertise “three cents a day for hospital care,” but exclude the unemployed and those 66 years and older (Goodridge & Arnquist, 2010).
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The program was expanded to provide benefits for the children and spouses of retirees, as well as for the survivors ofworkers who died in their productive years. This began the transformation of Social Security into a family insurance program. Lump sum payments were replaced with a monthly payment system (Annenberg, n.d.)
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Roosevelt established wage and price controls as part of the nation’s response to World War II. Businesses can’t attract workers with higher pay so instead they compete through added benefits, including health insurance which unexpectedly grows into a workplace perk. He urges passage and vows to use executive powers to do so if necessary (The Associated Press, 2012; Knox News, 2013).
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President Roosevelt, in his state of the Union message that year for the first time, called for a social insurance system that would extend "from the cradle to the grave" (CNN Health, 2009).
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The Social Security Board, in its Eighth Annual Report to Congress, calls for compulsory national health insurance as part of the Social Security system. (U.S. Social Security Administration [SSA-Chrono], 2012).
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One million old-age benefits were in effect (SSA-Chrono, 2012).
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President Truman calls on Congress for a health care overhaul. His 10-year plan proposes compulsory coverage, increased hospital construction, and doubling the number of doctors and nurses nationwide. Truman argued that the federal government should play a role in health care, saying "The health of American children, like their education, should be recognized as a definite public responsibility" (Goodridge & Arnquist, 2010; Harry S. Truman Library, n.d.).
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Truman sends health message to Congress and revised Wagner-Murray-Dingell bill is introduced to Congress again. An alternative Senate bill (Taft-Smith-Ball bill) authorizes grants to states for medical care of the poor. Neither bill gains traction (KFF, 2013; U.S. Social Security Administration [SSA-Appendix], 2013).
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In an effort to address rising and unequal costs of hospital care, President Truman signs the Hospital Survey and Construction Act (Hill-Burton), giving states access to federal grants to help pay for the maintenance and construction of public health centers. The act includes a provision requiring facilities to provide access to all patients without discriminating on the basis of race, nationality, or religion (CNN Health, 2009).
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Truman, in another special message to Congress calls for a National Health Program. Wagner-Murray-Dingell bill and Taft bill both reintroduced (KFF, 2013).
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The Social Security Act was amended to hold old-age and survivors’ insurance contribution rates for employers and employees at 1% for 1948 and 1949; and to schedule increases to 1.5 percent each for 1950 and 1951, and two percent each in 1952 and thereafter (SSA-Chrono, 2012).
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AMA launches a national campaign against national health insurance proposals . They employed a professional strategy hiring a public relations firm and focused their campaign by associating national health insurance with socialized medicine (KFF, 2013; Doherty & Jenkins, 2009, p. 7).
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National Health Assembly convened in Washington, D.C., by the Federal Security Agency. Final report endorses voluntary health insurance, but reiterated need for universal coverage (KFF, 2013).
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The Supreme Court upholds a National Labor Relations Board ruling that health benefits can be part of collective bargaining, cementing labor’s role in health care (Goodridge & Arnquist, 2010).
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The Health Insurance Council, an industry trade group ,estimates that 77 million people have purchased some type of voluntary accident or sickness insurance (Goodridge & Arnquist, 2010).
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Federal Security Administrator Oscar Ewing publicly proposes enactment of health insurance for social security beneficiaries (SSA-Appendix, 2013; KFF, 2013).
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A strong advocate of private health insurance, President Eisenhower signs the Internal Revenue Act of 1954, which creates tax exclusions for many employer-provided benefits including retirement, child care and medical expenses (CNN Health, 2009).
