University of Montana ScholarWorks at University of Montana Graduate Student Theses, Dissertations, & Professional Papers Graduate School 2015 We Are Against Socialized Medicine, But What Are We For?: Federal Health Reinsurance, National Health Policy, and the Eisenhower Presidency Jordan M. Graham University of Montana - Missoula Follow this and additional works at: https://scholarworks.umt.edu/etd Part of the History of Science, Technology, and Medicine Commons, Political History Commons, and the United States History Commons Let us know how access to this document benefits ou.y Recommended Citation Graham, Jordan M., "We Are Against Socialized Medicine, But What Are We For?: Federal Health Reinsurance, National Health Policy, and the Eisenhower Presidency" (2015). Graduate Student Theses, Dissertations, & Professional Papers. 4492. https://scholarworks.umt.edu/etd/4492 This Thesis is brought to you for free and open access by the Graduate School at ScholarWorks at University of Montana. It has been accepted for inclusion in Graduate Student Theses, Dissertations, & Professional Papers by an authorized administrator of ScholarWorks at University of Montana. For more information, please contact [email protected]. WE ARE AGAINST SOCIALIZED MEDICINE, BUT WHAT ARE WE FOR?: FEDERAL HEALTH REINSURANCE, NATIONAL HEALTH POLICY, AND THE EISENHOWER PRESIDENCY BY JORDAN MCKENZIE GRAHAM Bachelor of Arts, University of Montana, Missoula, Montana, 2012 A Thesis presented in partial fulfillment of the requirements for the degree of Master of Arts in History The University of Montana Missoula, Montana May 2015 Approved by: Sandy Ross, Dean of the Graduate School University of Montana Dr. Michael S. Mayer, Chair Department of History, University of Montana Dr. Jeff Wiltse Department of History, University of Montana Dr. Robert P. Saldin Department of Political Science, University of Montana Graham, Jordan, M.A., Spring 2015 History We Are Against Socialized Medicine, but What Are We For?: Federal Health Reinsurance, National Health Policy, and the Eisenhower Presidency Chairperson: Dr. Michael S. Mayer This project investigates the foundations of post-war health care in the United States by examining the first major proposal for federal involvement in health insurance, after the defeat of national health insurance in 1949. In doing so, this project aims to also illustrate Dwight Eisenhower’s presidency as one of limited liberal, or “Tory,” reform. The majority of primary sources were located at the Dwight D. Eisenhower Presidential Library in Abilene, Kansas. Secondary sources were chosen based on the frequency with which contemporary scholarship continues to rely upon and engage with them. In the first two chapters, the thesis examines the state of American health care coverage and the dialogue of reform that surrounded it. These chapters show that a significant divide existed between the quality of medical care and it’s availability by the 1950s. At the same time, a wide gap divided those who supported either a federal or private solution. Chapters three and four examine the evolution of reinsurance as a bill and its progress through the House of Representatives. The Eisenhower administration’s approach to the issue of health care coverage rested in between liberal calls for increased federal operation and conservative demands to leave the problem for private industry to solve. Eisenhower proposed reinsurance in the hope that it would increase the number of Americans with health insurance, while fending off the socialization of medicine. The thesis demonstrates that, instead of receiving even limited support from both sides of the spectrum, reinsurance was opposed by each. Despite the existence of a welfare state that relied on both public and private support, health insurance proved an inhospitable sector for further federal involvement in the post-war era. While the costs of health insurance prevented nearly 60 million Americans from receiving such coverage by the early 1950s, demands for a direct federal solution were overridden by the demands of industry and fears of increased government controls. Furthermore, reinsurance represented an archetypal illustration of Dwight Eisenhower’s “middle way” presidency. Reinsurance was a measure of Tory reform, designed to increase welfare while preventing a more radical option. ii ACKNOWLEDGEMENTS The idea of Dwight Eisenhower’s health reinsurance plan as my thesis topic began while reading the introduction to Michael S. Mayer’s The Eisenhower Years. This was the first I had heard of the program. After researching it further, I found very little literature dealing with health reinsurance directly. This lack of coverage, combined with my interest in the plan itself, drove me to pursue the Eisenhower plan as the ultimate focus of my graduate study. Any project of this size, especially when conducted by a “first-timer” such as myself, is the product of numerous individuals offering their own efforts and insights. Now, two years after I began this project, I gratefully acknowledge those who helped bring this master’s thesis to fruition. They include, first and foremost my advisor, Michael Mayer, history professor at the University of Montana. An exceptional teacher and mentor, he helped grow this project from an idea to the capstone of my academic career. Dr. Mayer has guided me through the world of research, writing, and even job hunting. For the members of my committee, I am grateful for their time and tremendous insights. Dr. Jeff Wiltse and Dr. Robert Saldin were each approached late in the life of this project, yet they provided support whole- heartedly. Dr. Saldin’s acumen for federal health policy, combined with Dr. Wiltse’s expertise in modern American social and cultural history, took the project to new areas and expanded its range and effectiveness in its present form, while offering new directions for future research. The University of Montana’s History faculty and graduate students have also proved invaluable in this process. Their courses helped me to build a foundation of historical understanding, expanding my views of both the past and present. In particular, I would like to acknowledge the assistance of Dr. Kyle Volk who tailored course projects to support my thesis, iii spent countless hours working to expand and improve it, and organized the Lockridge History Workshop where I was allowed to present what became my third chapter. The tireless efforts of Diane Rapp, the department’s administrator, proved extraordinarily valuable to my coursework and research. Our numerous discussions offered much needed support over the past years. The majority of this project was built on the research I conducted while at the Dwight D. Eisenhower Presidential Library in Abilene, Kansas. Archivist Kevin Bailey spent weeks finding and preparing research material prior to my visit, while he and Chalsea Millner worked with me everyday throughout my visit. This project certainly would not have been possible without the material collected in Abilene. This research trip was made possible through a generous grant from the Montana History Department’s H. Duane Hampton Fund. I know this project could not have even begun if it was not for the support of my family, friends, and especially my wife, Allison. Not only did they endure my academic absences and preoccupations, they have consistently participated in the project’s growth by listening, asking questions, and offering insight. Again, my wife Allison has proved my greatest asset. Not only did her tireless work to actually earn money allow me the ability to pursue this degree, she has continually provided balance to a life that would have otherwise been consumed entirely by academia. This thesis is dedicated to her. iv TABLE OF CONTENTS Page ABSTRACT………………………………………………………………………….…………...ii ACKNOWLEDGMENTS……………………..………………………………………….……...iii CHAPTER Introduction……………………………………………………………………………………..…1 1. Health Reinsurance, American Health Policy, and the Battle Over “Socialized Medicine”…...7 2. Post-War Health Policy and the “Fratricidal Twin Brothers”………………………..……….21 3. Health Insurance in the “Middle Way” Presidency……………………………………..…….41 4. We Are Against Socialized Medicine, but What Are We For? ……………………..…….….62 5. “The Camel’s Nose in Their Tent:” Evaluating the Failure of Reinsurance……………….....89 BIBLIOGRAPHY…………………………………………………………...………………….104 Introduction: On January 6, 1954, Dwight Eisenhower wrote to his brother Milton, one of his closest confidents and advisers, to offer his understanding of the federal government’s role in the “maintenance of prosperity.” Such a role, the President contended, must vary with times in which it exists. Given the economic uncertainties in post-war America, Eisenhower stated, “In these days I am sure that the government has to be the principal coordinator and, in many cases, the actual operator for the many things that the approach of depression would demand.” While he did not list health care as an example within the letter, President Eisenhower’s belief that the government had a role to play in American welfare foreshadowed his call for a new form of federal involvement in the field of health care.1 Eisenhower delivered his second State of the Union Address on January 7, 1954. The first Republican president in over two decades, he had won a landslide election campaigning to end what conservative Republican senator, Karl Mundt, called, “K1C2” or “Korea, Communism, and Corruption.” By the end of his first year,