So what emerged after the Second World War was health insurance for veterans – and a lot more of them now – provided by the government, and private insurance for everyone else, usually attached to your job. Unions fought hard to have health insurance packages as part of their contracts, and big corporations could afford the cost of providing insurance to their employees.
The obvious problem with this cobbled-together approach was that it left out millions who were neither veterans nor in the workforce. Like the poor and the unemployed. And even more so, the retired and the elderly. They often faced illness with nothing.
That’s why Congress invented Medicare and Medicaid in the mid-1960s. Medicare in particular has worked as it was intended to, and most elderly people who use it depend on it, even if they don’t always understand how it’s funded. Who can forget that angry woman in South Carolina in 2009 screaming at her Congressman: “Keep your government hands off my Medicare!”
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In the last quarter of the 20th century, therefore, the private sector was responsible for providing health insurance to anyone who wasn’t poor, a veteran, or retired. Only it didn’t. Plenty of small employers couldn’t afford health insurance plans for their workers, and plenty of those plans refused to carry you if you had a pre-existing condition or didn’t pass your physical exam, or they capped coverage in ways that made getting sick unaffordable.
So as a consequence, by 2008 roughly 40 million Americans did not have access to or could not afford private-market health insurance. All while standards of medical care continued to rise. Diseases that were a death sentence a generation ago are now routinely cured, but only if you have health insurance to cover the treatment. The private sector, in essence, was making basic decisions about who lived and who died, based purely on who could afford the premiums.
The Affordable Care Act was necessary precisely because those people had no other way to access health insurance. It wasn’t an intrusion into a market that was working, so much as it cleaned up the mess left by our ad-hoc private insurance system.
So the next time you hear a politician talk about a “market-based solution” to health insurance, dial 911. The market has had 100 years to provide a solution, and it has failed to do so.
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Steven Conn is the W. E. Smith Professor of History at Miami University.