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Thursday, October 12, 2017

The US Rejected Obamacare in 1918

The US Rejected Obamacare in 1918

 

The US rejected Obamacare in 1918. What a difference a mere hundred years makes! US voters rejected mandatory health insurance, or Obamacare, at the turn of the last century. It took supporters almost another century, but they finally won.

For a quarter century before WWI, many of the nation’s young people went to Germany to complete their college education and returned determined to recreate the US in the image of socialist Germany. Richard Ely was one. He founded the American Economic Association for that sole purpose. He and economist Irving Fisher would lead the drive for universal, mandatory health care insurance.

At the time, middle class and wealthier Americans paid a fee each time they visited a doctor. But the fees were too high for the working poor who instead organized into mutual aid societies to help each other with medical costs. Known as lodges, such as the Elks, or secret societies such the International Order of Odd Fellows (IOOF) or the Freemasons, or just fraternal organizations, mutual help societies existed for centuries. They followed the ancient guild practices of mutual aid to craft members. David T. Beito beautifully writes their history in his book From Mutual Aid to the Welfare State: Fraternal Societies and Social Services 1890-1967, published by the University of North Carolina Press in 2000.

Socialists became wary of lodges, or fraternal societies, partly because of their secret passwords and handshakes. But the societies developed those for security purposes because they suffered from fraud by non-members wanting to cash in on the benefits. Two centuries ago an IOOF chapter in one state couldn’t easily contact another out-of-state chapter to confirm the membership of someone who wanted aid. The passwords and handshakes solved the problem.

In the earliest day, the lodges offered burial insurance because poor people were terrified of suffering the indignities of a pauper’s burial. Later, they added healthcare and life insurance, built orphanages and hospitals, and provided pensions. The Shriners branch of the Freemasons still maintain children’s hospitals. Without the lodges, most members could not afford to pay fee-for-service doctors and would otherwise go without medical care. Readers who want to know how medical care should operate and what is wrong with today’s system should read Mr. Beito’s book.

Medical Establishment Attack on Mutual Aid

The medical establishment began attacking the lodges as early as the 1890s because the lodges would contract with doctors for a flat fee per year per member to provide medical care for lodge members. The practice, known as “capitation,” is making a comeback with the federal government as a means to restrain the explosive growth in the costs of medical care. Lodges usually contracted with doctors from private medical school

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