Long before Obamacare, labor unions had been advocating for a healthcare system that more closely resembled the universal healthcare offered in other countries, particularly Germany. To mark Labor Day 2012, here are some significant milestones in the push for healthcare for all and healthcare reform.
At its convention in 2009, the AFL-CIO published a statement reflecting on that history and its desire for universal healthcare coverage:
For more than 100 years, America’s unions have called for universal coverage built on a social insurance model, an approach that has proven effective and efficient across the globe and one we have employed successfully for decades to provide income and health security for the elderly. Labor led the lobbying effort to enact Social Security in 1935 and Medicare in 1965, and we have backed many legislative efforts since then to expand coverage and control costs.
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Industrial sickness insurance
These policies began to appear as early as the time of the Civil War. Employers would charge staff a small portion of their earnings and in exchange would provide compensation when they missed work due to illness. By the time World War 1 came around, these funds and similar ones sponsored by fraternal societies, covered 30 to 40 percent of non-agricultural wage workers in more industrialized states, about 9 million people. It was originally referred to as workingman’s insurance or sickness insurance. In the late Progressive Era, reformers promoted government insurance programs to replace these sickness funds. To sound more British, they used the term health insurance, according to Rhodes College Economic History Professor John Murray. American Association for Labor Relations singled out the insurance for those who paid cash and left out those paid in kind, such as agricultural workers and domestic workers, which disproportionately excluded African-Americans and women.
In an extract from his book Murray explained the system this way:
They were financial institutions that extended cash payments and in some cases medical benefits to members who became unable to work due to sickness or injury. The term industrial sickness funds is a later construct which describes funds organized by companies, which were also known as establishment funds, and by labor unions. These funds were widespread geographically in the United States; the 1890 Census of Insurance found 1,259 nationwide, with concentrations in the Northeast, Midwest, California, Texas, and Louisiana (U.S. Department of the Interior, 1895).
Teddy Roosevelt: During his 1912 presidential campaign, Roosevelt advocated insurance for working Americans similar to the system Germany had in place in the 19th century.
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Progressive efforts at the state level
In an interview with MedCity News, Murray legislative efforts at the state level in New York and California voted on insuring workers and state-level in the early part of the century but failed.
Rise of commercial insurers
In the 1920s -1930s industrial sickness insurance faced increased competition from commercial insurers offering what we would think of as traditional insurance policies. Because the sickness funds never changed their approach, tending to be informally organized, they couldn’t compete. “What changed was commercial insurers started investing in actuarial insurance, that allowed them to provide premium rates for a given level of benefit and narrowed the gap between premiums and essential benefits to the point they could underprice sickness funds,” Murray said. Employers would also get a more favorable tax advantage. What tended to happen, especially during the depression, was sick people would get laid off first.
World War II era
A combination of factors led to a spike in the number of employers offering healthcare plans during the war years, Frank Dobbin, a professor with Princeton University, pointed out in an article in the American Journal of Sociology published in 1992. The passage of Social Security and the Wagner Act spurred union and business support for private insurance, which prompted companies to offer it as a fringe benefit.
Nelson Hale Cruikshank
Not exactly a household name, Nelson Cruikshank was responsible for helping to enhance Social Security as part of the union movement’s commitment to federal social insurance programs, including national healthcare insurance and income supports for the poor, people with disabilities and the unemployed.
As Tom Leibfried of the AFL-CIO sees it, there’s still work to be done to prevent what’s been achieved from being dismantled. He also points to a 10-year decline in the number of employers sponsoring health insurance.
