Was There Health Insurance In 1912?

Theodore Roosevelt. Click image to expand.

“Roosevelt’s Progressives were the first major American party to pick up the baton of health care reform”

By Brian Palmer
Only for certain low-income laborers. Health insurance was extremely rare in the early 20th century. Most Americans paid for health care on a fee-for-service basis, while the completely destitute got treatment gratis at low-quality municipal hospitals. Some workers got free doctor visits at their factories, which kept physicians on staff to limit sick days. A few working poor did manage to collectivize health care outlays through their fraternal orders—clubs that were limited to members of a particular religious or ethnic group. These pioneering organizations paid physicians a set fee to care for all members who contributed to the group’s coffers. Professional medical organizations opposed these arrangements, arguing that only inexperienced, incompetent, or dipsomaniacal physicians would agree to them.

In the first years of the 20th century, income-replacement insurance was far more common than health insurance, since medical costs were relatively low. Under this system, workers who missed more than two weeks of work due to illness would receive between $5 and $10 per week for a maximum of 13 weeks. About one-third of workers received such coverage through fraternal orders, trade unions, or private insurers.

Roosevelt’s Bull Moose campaign coincided with a health care revolution, when medical capabilities and costs were expanding rapidly. In 1870, there were only 112 hospitals in the United States, probably because doctors couldn’t do much to help patients other than hacking off limbs or sedating them with morphine. (Morphine wasavailable over the counter until 1914, anyway.) Hospital patients were mostly poor people who couldn’t work and had no one to care for them. The wealthy, meanwhile, paid for home-based care. Even amputations were frequently performed in a patient’s home. But starting in the 1890s, hospitals became much more useful. Doctors couldtreat diphtheria and see inside the body with radiography. Surgeons began working in aseptic operating rooms, enabling them to open the chest cavity and remove diseased organs. In the 1900s, new diagnostic tools like the Wasserman syphilis testbecame available. Medical schools moved from two-year curricula—with the second largely repeating the first—to four-year, science-based programs that included practice sessions at hospitals. By 1920, there were 6,000 hospitals nationwide.

When the working class began to clamor for access to the new technologies, Roosevelt’s Progressives were the first major American party to pick up the baton of health care reform. (Germany had a compulsory health-insurance program since 1883, and the British National Insurance Act passed in 1911.) While the party platform offered a vague endorsement of a socialized insurance system, Progressives pushed a much more specific program in state legislatures in 1915. Participants and their families would be guaranteed all medical and hospitalization expenses, income replacement for up to six months, $50 for funeral expenses, and complete coverage of labor and delivery costs with an eight-week maternity benefit. The plan would cost about $2 per worker, with the expense split between employers ($1.20), workers (40 cents), and the state (40 cents). All workers earning less than $100 per month would be required to participate, and the burden on the employer would increase for particularly low-wage laborers.

The plan was never adopted by any state, as doctors, employers and existing insurance companies looking to move into the health care business opposed it. The fraternal orders didn’t like the funeral benefit, which threatened to undermine their profitable burial-insurance programs. The program’s resemblance to German policy did not help once the United States entered into World War I. In 1919, with the Red Scare, state health insurance opponents branded the program Bolshevism.

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Explainer thanks Paul Dutton of Northern Arizona University, Beatrix Hoffman, author of The Wages of Sickness: The Politics of Health Insurance in Progressive America, Howard Markel of the University of Michigan, and Ronald Numbers of the University of Wisconsin.