The U.S. healthcare system is the way it is because of decisions made by people at various points in the last century. America’s healthcare issue is the result of a series of interconnected decisions and events and catastrophes. This episode is a part of our 5 c’s of history episode and today we are exploring contingency. Contingency is “The idea that every historical outcome depends on a multitude of prior conditions; that each of these prior conditions depends, in turn, upon still other conditions; and so on. The core insight of contingency is that the world is a magnificently interconnected place. Change a single prior condition, and any historical outcome could have turned out differently.” So we’re going to do an overview of the American health insurance system and touch on some key points along the way.

Transcript for: Crappy Healthcare is Not Natural: the U.S. Health System is Contingent on a Lot of Bad Decisions

Researched and written by Elizabeth Garner Masarik, PhD

Produced by Averill Earls, PhD

Elizabeth: I’m a mindless Instagram scroller and I follow a lot of accounts that post old Twitter posts, most of them funny or tongue in cheek. A lot of them are about the American healthcare system. Like this one from @danielleweisber

“I’m an AMERICAN I bleed RED WHITE and BLUE because something is WRONG with me but I can’t afford the COPAY to see my DOCTOR”

Averill: Or this one from @emily_murmane

“My health insurance sending me constant emails: Hi Emily! Just want to make sure you’re taking full advantage of your Blue Cross Blue Shield insurance policy! Stay healthy this fall 🙂

My health insurance when I try to see a doctor bc I’m dying: Ayy fuck you lmao”

Elizabeth: Or this gem of a response to a headline reading “The newest version of ChatGPT passed the US medical licensing exam with flying colors– and diagnosed a 1 in 100,000 condition in seconds.”

The response “Can’t wait for the future where doctor bot can almost instantly diagnose a rare and hard to detect condition so insurance bot can deny coverage for the treatment much more efficiently.”

These are obviously tongue in cheek and if you have money and a good insurance plan in the U.S., you’ve got pretty good healthcare. But of course that’s a minority of Americans. The majority are still underserved, with the poor and people of color exponentially left out of great coverage and medical care.

Averill: But it wasn’t inevitable that the U.S would wind up in this situation. There were even models and alternate paths that our politicians and law makers implemented and explored that could have constructed a very different outcome for Americans. Our current healthcare system is the way it is because of decisions made by people at various points in the last century. America’s healthcare issue is the result of a series of interconnected decisions and events and catastrophes.

Elizabeth: This episode is a part of our 5 c’s of history episode and today we are exploring contingency. I’ll use Thomas Andrews and Flannery Burke’s definition: Contingency is “The idea that every historical outcome depends on a multitude of prior conditions; that each of these prior conditions depends, in turn, upon still other conditions; and so on. The core insight of contingency is that the world is a magnificently interconnected place. Change a single prior condition, and any historical outcome could have turned out differently.”

Averill: So we’re going to do an overview of the American health insurance system and touch on some key points along the way.

I’m Elizabeth

And I’m Averill

And we are your historians for this episode of Dig.

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Elizabeth: The U.S. government has provided some kinds of health benefits to certain inhabitants or citizens since inception. For example,The Continental Congress of 1776 encouraged enlistments during the Revolutionary War by providing pensions for soldiers who were disabled. The first stand-alone medical facility for veterans was authorized by the Federal Government in 1811. Previous to that, states had provided, in varying degrees, hospital care for veterans.

Averill: After the Civil War, many State veterans homes were established. Since domiciliary care was available at all State veterans homes, incidental medical and hospital treatment was provided for all injuries and diseases, whether or not of service origin. Indigent and disabled veterans of the Civil War, Indian Wars, Spanish-American War, and Mexican Border period as well as discharged regular members of the Armed Forces were cared for at these homes. Now of course you should read our own Sarah Handley-Cousins book, Bodies in Blue, to learn about how well these programs did or did not work and the gendered politics behind disability.

Elizabeth: But the point here is, there was state and federally sponsored healthcare for most United States veterans.

Averill: Congress established a new system of veterans benefits when the United States entered World War I in 1917. The advocates for the creation of a veterans’ bureau made a pragmatic and compelling argument. They contended that establishing such an organization was not an unnecessary expansion of the government but a crucial and morally justifiable duty. The pre-war War Risk Insurance Act had made specific commitments to provide financial and medical assistance to veterans. The advocates contended that creating a veterans’ bureau was essential to ensure that these promises were kept.

Elizabeth: Despite those arguments, some legislators argued that the proposed agency had to be limited. Some balked at the idea that the eligibility of men who had never seen the front lines, and in some cases, had been found unfit for service, would be eligible for future benefits, including hospital care.

Averill: The notion of providing unfettered, universal access to benefits, even when it was deemed practically justified for a specific group of citizens, was met with hostility as exemplified by the position of Robert Luce, a Republican from Massachusetts. He asserted the agency, “involves an immeasurable expense over 50 to 75 years, but also involves a long step toward that centralization of activities which some people call socialism.”[1]

Elizabeth: But in August of 1921 “an Act to Establish a Veterans’ Bureau” (VB) established a system of federally sponsored hospitals with a central office in Washington, D.C. and more than 150 regional offices. The Bureau had a multifaceted scope of responsibilities related to veterans’ healthcare and was responsible for managing and distributing insurance benefits to veterans, oversaw vocational education programs for veterans, and provided actual care to veterans such as examinations, hospitalizations, and outpatient medical care.

Averill: Congress passed the World War Veterans’ Act in June of 1924. The act expanded the eligibility for hospitalization under the Veterans Bureau (VB). It stipulated that all honorably discharged veterans who had served since 1897 could receive hospitalization, broadening the scope of care to include a wider range of veterans.The period following the passage of the act saw a substantial increase in the number of veterans receiving hospital treatment sponsored by the VB. The patient count grew from around 18,000 in 1924 to more than 30,000 in 1930.The act established a fundamental principle that medical care should be offered as a federally sponsored entitlement to former service members. This was a significant shift in policy, emphasizing the government’s responsibility to provide medical care to veterans as part of their benefits.

Elizabeth: In 1930 the VB was merged with the Bureau of Pensions and the National Home for Disabled Volunteer Soldiers to form the Veterans Administration (VA). Then, after World War II, there was a resurgence of public concern for former service members, leading to increased federal attention and funding for veterans’ healthcare. Veterans’ hospitals began affiliating with medical schools .Over the mid-twentieth century, the veterans’ healthcare system expanded to include hospitals, nursing homes,outpatient services, and education and training for medical professionals. In 1989, the VA transitioned into the Department of Veterans Affairs, achieving cabinet status and the administration of health services was placed under a reorganized branch—the Veterans Health Administration. More than nine million former service members receive healthcare through the VHA today.

VA map showing all 21 of the Veterans Integrated Service networks, colored by region. United States Department of Veterans Affairs –

Averill:OK, so we’ve established that the federal government has provided healthcare to some of its citizens for a very long time. But what if you weren’t a veteran? Let’s jump back a bit into the Progressive Era. With the massive growth of cities, one of the most pressing issues was health and the history of the development of social politics can indeed be framed as a narrative of the struggle to establish a comprehensive concept of public health.The growth of cities brought about new health risks. The concentration of people in urban areas, often in crowded and interdependent living conditions, introduced health challenges that were not as prevalent in rural settings. These risks were often hidden from plain view,  like water-borne microbes. The battle for a concept of public health recognized that health is not solely determined by individual choices and behaviors but is influenced by the conditions in which people live and work, including factors like labor conditions, housing, and the overall social environment.

Elizabeth: Around 1915 the American Association of Labor Legislation (AALL) was lobbying state legislatures to adopt health insurance for workers. State-run health insurance had been in place in both Germany and Britain for more than 25 years and had proved successful in both countries. The AALL proposed bills took the best part of both and combined them into a plan that could work for industrialized states. It included sick pay and medical treatment for low-income wage earners and their dependents and help with the expenses of childbirth, and a funeral and death benefit. The benefits were to be half-financed from employers’ contributions and half to be financed by employees, and the administration of local funds to be controlled by both. Health insurance bills based on the AALL plan were proposed in 18 state legislatures in 1916 and 1917. However, once the U.S. entered WWI, opponents of any kind of state mandated health insurance didn’t miss an opportunity to say that the plans were “made in Germany” at any chance they got.

Averill: U.S. doctors were one cohort that opposed state sponsored health insurance. This was unlike in Germany, where doctors professionalized within a public health care system and relied on their experience doing contract work with the state, and in Britain, doctors almost always did some contract work. In contrast, U.S. doctors, with no experience with public health contracts, rejected the plans altogether.

Elizabeth: However, the strongest opposition to these health insurance plans were from commercial insurance companies. They had lobbyists in every state and town, overwhelming lawmakers with arguments against state insurance. According to historian Daniel Rodgers, the Great Eastern Casualty Company insurance company of New York told all of its agents that the New York health insurance bill of 1916 spelled ‘the end of all Insurance Companies and Agents and to you personally the complete wrecking of the business and connections you have spent a lifetime building and the loss of your bread and butter.”[2]

Averill: All of the proposed state bills for health insurance failed to be enacted into law, however not without fierce debate. While social insurance systems grew in Europe there was little headway made in the United States. However, one plan did succeed.The Sheppard-Towner Act, officially known as the Sheppard-Towner Maternity and Infancy Protection Act was passed in 1921 and was the first national public health program and it was for the sole purpose of aiding children and child-bearing women.

Elizabeth: The primary goal of the Sheppard-Towner Act was to provide federal funding to states for programs and initiatives that would support the health of mothers and infants. It aimed to reduce maternal and infant mortality and improve overall health outcomes in these vulnerable populations. Under the act, the federal government provided grants to individual states to establish and operate programs that focused on maternal and child health. These programs included prenatal care, infant care, nutrition education, and general health education for mothers.The act encouraged the expansion of public health services and the development of clinics and outreach efforts to provide health education and medical care to pregnant women and young children.

Averill: Critics argued that the act represented an overreach of federal authority into matters traditionally regulated by states. Many believed that maternal and child health fell within the purview of state governments, and they were concerned about the federal government’s involvement in healthcare.Various interest groups, including doctors and commercial insurance companies again opposed the act over concerns they would lose autonomy and profits. 

Elizabeth: Many women’s groups and clubs had lobbied HARD for the passage of the Sheppard Towner Act and federal legislators felt pressure to vote in favor of the Act in 1921 because they were afraid of the massive influx of new women voters brought in by the passage of the Nineteenth Amendment. However, by 1927 it was clear that women were not voting in nearly the numbers that suffragists had hoped and legislators had fears, nor were the ones that were voting doing so in obviously partisan ways and so the Act was not renewed and it expired in 1929.

Averill: In response to massive labor activism and as a way to avoid the need for government oversight, some large companies began to participate in what has become known as welfare capitalism, also known as industrial paternalism and is rooted in the “free market” (this is indeed in air quotes, there is no such thing as a free market) belief that Americans should look to workplace benefits provided by private-sector employers for protection against economic fluctuations instead of the government.

Elizabeth: Welfare capitalism was a strategy employed by some employers and businesses to resist government regulation, independent labor unions, and the establishment of a comprehensive welfare state. This approach sought to maintain control over labor relations and limit the influence of unions and government intervention. Essentially, some employers, in order to increase productivity and avoid complaints about larger structural issues, began offering welfare services to their employees. One of these incentives was often medical benefits.

Averill: Business-led welfare capitalism was only common in American industries that employed skilled labor and not all companies freely choose to provide even minor benefits to workers. The skilled trades and the unions that represented those trades, for the most part, did not allow people of color to join their ranks.  This was also a time when women were explicitly barred from the skilled trades as well. Therefore, the welfare benefits those skilled tradesmen received were reserved for white men. So, the benefits offered by welfare capitalist employers were often inconsistent and varied widely from firm to firm and only flowed to white, male tradesmen and professionals.

Elizabeth: The limits of welfare capitalism became apparent during the Great Depression when of course the lack of a universal social safety net became glaringly obvious. However, with the industrial ramp-up of World War II and industry’s massive need for workers, many businesses turned to fringe benefits and offered more generous health plans. But yet again, these benefits flowed to the white breadwinners of families, women and people of color were not allowed to work in the jobs that supplied these types of benefits.

Averill: Private company employment and insurance became further enmeshed in 1943 when the Internal Revenue Service ruled that employer-based health care should be tax free. Another law passed in 1954 further enhanced the tax advantages of private employer insurance.

Elizabeth: Of course there was still a lot of support for some kind of national, universal healthcare system. Seven months into the presidency he was thrown into after Franklin D. Roosevelt died, President Truman proposed a “universal” national health insurance program. In his remarks to Congress, he declared, “Millions of our citizens do not now have a full measure of opportunity to achieve and enjoy good health. Millions do not now have protection or security against the economic effects of sickness. The time has arrived for action to help them attain that opportunity and that protection..In the past, the benefits of modern medical science have not been enjoyed by our citizens with any degree of equality. Nor are they today. Nor will they be in the future—unless government is bold enough to do something about it. .”[3]

Averill: Now of course this wasn’t dreamed up by Truman but was advocated for by all kinds of reformers. The support for President Truman’s proposed National Health Act was divided along ideological and interest group lines, with unions like the Congress of Industrial Organizations (CIO) strongly supporting the plan, and the American Medical Association (AMA) opposing it and, you guessed it, labeling it socialized medicine and therefore evil.

Ronald Reagan and the American Medical Association, 1961.

Elizabeth: But, as any American is well aware, we still don’t have a comprehensive, universal health system. Admitting defeat, Truman wrote “These ‘skin flint’ loan companies who charge the people from twenty-seven to fifty per cent interest on small loans, I think are the worst vultures we have to contend with — they and the American Medical Association are the very reason there has been such a howl about health insurance.”[4]

Averill: Every president since FDR has had to have a stance on public healthcare. When Lyndon Johnson took office he moved forward with a bold domestic agenda he called “The Great Society.” An old New Dealer himself, LBJ saw himself as building upon the legacy of Franklin D. Roosevelt’s New Deal by expanding social and economic programs. As part of this vision, Johnson championed the establishment of Medicare and Medicaid, which were significant components of his Great Society agenda. Medicare extended health care coverage to elderly and disabled Americans and was designed to work in conjunction with the existing Social Security program. Medicaid supplied health insurance to low-income Americans.

Elizabeth: The Great Society faced opposition from rising conservatives like Senator Barry Goldwater and then Governor Ronald Reagan.

Averill: Even as these changes were made, many Americans by this point in time saw insurance benefits as a natural benefit of paid employment, not as an anomaly or a contingent outcome of historical forces. Essentially, people with good jobs (think white, educated, mostly male) get health care through waged work and almost everyone else (unskilled workers, single women) looks to the government for health care. Many people stopped questioning this system and just accepted it as the “natural” order of things.

Elizabeth: But of course, this episode is all about contingency and how every historical outcome is based on previous conditions and outcomes. At any time, different paths could have been taken, different decisions could have been made, or unmade. None of these outcomes were inevitable.

Averill: In the 1970s, President Nixon did try to get a law passed that would mandate private employers to provide health insurance, so nto universal care– just a strengthening of the private insurance plan, but even that was unsuccessful.

Elizabeth: But Nixon’s plans too were contingent on other factors. Nixon’s two proposed healthcare policy overhauls- the National Health Insurance Partnership plan and the Comprehensive Health Insurance Plan were both formed, advertised, and communicated to the public not as stand alone plans but in response to the politics and health plan of Democrats in the Senate, most notably Edward Kennedy of Massachusetts.

Averill: Almost on every occasion, the Nixon administration’s internal conversations regarding healthcare were strongly driven by their desire to divert credit from Senator Kennedy’s initiatives and instead focus on the President’s efforts. They aimed to deflect attention away from Kennedy’s healthcare proposals and counter the extensive media and public interest often directed towards the Massachusetts senator.[5]

Elizabeth: As the New Deal liberal order began to wane and the rise of neoliberalism reigned supreme, the philosophy of maximizing shareholder value became dominant, and defined contribution plans such as 401(k)s, replaced guaranteed pensions. At the same time, the average duration of employment at the same firm decreased significantly and many worker protections were chipped away.

Averill: In 1993 President Clinton appointed his wife, Hillary Clinton, to chair the President’s Task Force on National Health Care Reform. President Clinton had made healthcare reform a central promise during his 1992 election campaign. There was a sense of urgency to fulfill this campaign pledge, and there was substantial public support for healthcare reform at the time.

Elizabeth:: But of course the forces that had historically been against health care reform were still going strong. Critics of healthcare reform, including conservative talk radio hosts, used fear-based rhetoric to convey the idea that government intervention in healthcare would lead to a loss of personal freedom and government control over medical decisions.

Averill: They often presented worst-case scenarios and exaggerated potential negative consequences.The insurance industry had a financial stake in the healthcare reform debate and through advertising and lobbying, sought to protect its interests and prevent reforms that might reduce the role of private insurance in healthcare.

Elizabeth: Throughout 1993 the “Harry and Louise” campaign was a significant and highly visible television advertising campaign funded by the Health Insurance Association of America (HIAA), a predecessor organization of the America’s Health Insurance Plans (AHIP), a health insurance industry lobby group. The campaign was launched in response to the Clinton health care plan of 1993 and various Congressional health care reform proposals in 1994.The ads depicted Harry and Louise expressing their concerns about the potential bureaucratic complexities and government intervention in healthcare reform proposals and conveyed the false idea that the proposed reforms could lead to loss of choice and control over their healthcare decisions.

Averill: A major overhaul to the health care system didn’t happen during the Clinton years but there were some reforms. The State Children’s Health Insurance Program (CHIP) was established as part of the Balanced Budget Act of 1997. This program provided  health insurance coverage for children in families with low to moderate incomes who did not qualify for Medicaid but still lacked access to private health insurance.CHIP represented a significant expansion of healthcare coverage for children. It aimed to bridge the gap between Medicaid, which primarily covered low-income families, and private insurance, which could be unaffordable for many working families. It provided a safety net for children in families who were above the Medicaid income threshold but still faced financial barriers to obtaining healthcare coverage. However, it required state buy-in and not all states enacted CHIP programs immediately.

Elizabeth: The experiences of the Clinton administration’s healthcare reform efforts and the strong opposition from the insurance industry played a significant role in shaping the approach of President Obama’s healthcare plans. The Obama administration recognized that securing support from key stakeholders, including the health insurance industry, was essential to passing comprehensive healthcare reform and compromises were made to ensure that private insurers would participate in the new insurance marketplaces created by the ACA. But this of course let down a lot of people who were hoping for a universal public option.

Averill: One of the primary objectives of the Affordable Care Act ( ACA), or Obamacare,  was to expand health insurance coverage to a larger portion of the population, including those who had been historically underserved. This included the working poor, young adults, and individuals with pre-existing conditions.

Elizabeth: While it faced significant political and policy challenges, it succeeded in expanding coverage to millions of Americans and improving protections for those with pre-existing conditions. And this time the AMA was on board! No longer bringing up the boogeyman of socialism, the AMA supported the passage of the ACA. However, I find this kind of funny, if you go to the AMA website you’ll find a post titled “Timeline of AMA’s efforts to support health insurance coverage.” It’s a three minute read and goes back to old old year of.. checks notes… 2017.

Averill: Obviously it’s more complicated than that but as an organization the AMA has a long history of helping to prevent universal healthcare in America.

Elizabeth: By the time “Obamacare” was passed, roughly 20% of Americans already had access to medical services via federal programs like the VHA, Medicare, Medicaid, or the Children’s Health Insurance Program. Passage of the ACA was dependent on a multitude of previous debates and policies. However, the ACA is new in that everybody is eligible, (unless you work for Hobby Lobby), to access it you don’t have to be over 65 or under a certain income level or a veteran. However, it’s still a market-based program.

Averill: It’s also been chipped away at since inception and has faced no small amount of attempts to dismantle it altogether. Since the law’s enactment, Republicans have sought to “repeal and replace” the ACA. In 2016, holding the majority in both the Senate and the House, Republicans passed the Restoring Americans’ Healthcare Freedom Reconciliation Act of 2015, which aimed to revoke several provisions of the ACA. However, President Barack Obama vetoed the bill on January 8, 2016.

Elizabeth: In 2016, Republicans, including President Donald Trump (R), campaigned on a platform of dismantling and substituting the ACA. Following their electoral victories, securing the presidency, Senate, and House, Republicans made repeated attempts to repeal and replace the ACA throughout Trump’s presidency, with small wins but no major overhauls.

Averill: The defeat of the major repeal bills did not diminish the Republican Party’s determination to do away with the ACA. The Trump administration took various actions such as discontinuing funding for outreach, ceasing payments for crucial insurer subsidies, and revising regulations governing the types of insurance private insurers could offer. Additionally, it adjusted the guidelines concerning how states could structure their Medicaid programs. Towards the end of 2017, Congress approved a tax bill that got rid of the ACA’s penalty for individuals without insurance.”

Elizabeth: This year House Republicans have pushed forward a series of bills that may lead to decreased health insurance expenses for specific businesses and individuals, in part by scaling back certain consumer safeguards. Instead of an outright repeal, this more nuanced endeavor might enable more employers to circumvent the fundamental benefit mandates and a majority of state regulations set by the ACA.

Averill: Concurrently, the Biden administration is attempting to reverse certain health insurance regulations put in place by the Trump administration, with a proposal to reinstate stricter guidelines for short-term insurance plans.

Max Roser – Link between health spending and life expectancy: US is an outlier. May 26, 2017.

Elizabeth: In every nation, healthcare expenditure as a percentage of the overall economy has shown a consistent upward trajectory since the 1980s, with spending growth outpacing economic expansion. However, the U.S. spends nearly double on its healthcare costs over other high-income countries with robust healthcare systems like Canada, France, Germany, Japan, and the U.K. 

Averill: Furthermore, people in the United States experience the worst health outcomes overall of any high-income nation and are more likely to die younger, and from avoidable causes, than residents of peer countries.

Elizabeth: Despite the genuine challenges that many individuals encounter in the realm of healthcare, along with the ongoing deliberations regarding the next steps to take, Republican endeavors to abolish the ACA have underscored a consistent sentiment expressed in polls: that the majority of Americans prefer advancing toward universal healthcare coverage, rather than away from it.

Averill: However, as I hope we’ve shown you in this tiny snapshot of the history of health insurance in the U.S., this is not a simple matter with a clear trajectory but one that is, and has always been, contingent on American politics and social policy.

Thanks for listening.

Averill: As always, we invite you to follow us on Facebook, Twitter, and Instagram at dig_history, or join our Facebook group – Dig History Pod Squad. If you have a comment or question or want to share some kind words with us, you can always email us at – we love listener mail! If you’re an educator, we’ve got a compendium of episodes you can use in the classroom – and free teaching resources, including full lesson plans! – on our website, We realize that recent changes to curriculum in states like Florida and Texas will complicate being able to use our podcast episodes in the classroom, so please reach out if there’s something we can do to be helpful to you and your classroom. You’ll also find full bibliographies, the scripts for all of our episodes, resources, and a link to our swag store at

Further Reading:

Conn, Steven. ed. To Promote the General Welfare: The Case for Big Government. Oxford UP, 2012.

Gerber, David A. Disabled Veterans in History. Ann Arbor, Michigan: University of Michigan, 2012.

Hoffman, Beatrix. Healthcare for Some: Rights and Rationing in the United States Since 1930. Chicago: The University of Chicago Press, 2012.

Klein, Jennifer. For All these Rights: Business, Labor, and the Shaping of America’s Public-Private Welfare State. Princeton University Press, 2006.

Rodgers, Daniel T. Atlantic Crossings: Social Politics in a Progressive Age. Harvard University Press, 2000.

Starr, Paul. Remedy and Reaction: The Peculiar American Struggle over Health Care Reform. New Haven, Connecticut; London: Yale University Press, 2011.

[1] Quoted in Jessica Adler, “People were Skeptical About Veterans’ Hospitals, Too: The Affordable Care Act and Health Policy Precedents,” Origins: Current Events in Historical Perspective.

[2] Daniel Rodgers, Atlantic Crossings, 262.

[3] President Truman’s Fight for National Health Insurance, 1949-1953

[4] Harry Truman to Donald Cook, Aug. 14, 1952.

[5] Jennifer Hopper, “Same Messenger, New Message: Senator Kennedy and the Framing of Health Reform,” in Political Rhetoric and the Media (Purdue University Press, 2023), 63.


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