12/04/2008 05:12 am ET Updated May 25, 2011

Finally, Health Insurance 90 Years Late

Believe it or not, in February 1917 Congressman Meyer London of New York won bipartisan support in the House of Representatives (189-138) for a commission to make recommendations to President and Congress concerning mandatory "social insurance" including health insurance. His approach, a presidential commission, was the one Franklin Roosevelt followed two decades later in developing his version of social insurance, the Social Security Act of 1935.

Back in 1916 and 1917, health insurance was expected to be "the next great step in social legislation," but it did not happen. Americans do not understand how close the country came to having universal health insurance nine decades ago or why it failed. Understanding this failure will help a new administration in Washington deal with the almost incomprehensible health care mess that exists today.

The story starts in Germany in 1883. Count Otto von Bismarck, the "Iron Chancellor," championed government-sponsored social insurance including "sickness insurance" to win working class voters away from the Socialists. It was not a socialist program. It was an anti-socialist program. Bismarck rammed it through and enlarged it over the years, overriding opposition from his own conservative allies and from the Socialists who knew the program was aimed at weakening them.

German workers loved Bismarck's program, and so did employers and the military recruiters. Worker productivity soared and the army got healthier recruits than those in other countries. No wonder most "advanced" nations followed Germany. Great Britain in 1911 was the last of the important European countries to do so. Lloyd George visited Germany and studied the program. As Prime Minister he overcame fierce resistance in the House of Lords to create the UK's version of social insurance and the United States was expected to follow.

In February 1916, Meyer London, the lone Socialist in the 64th Congress introduced a resolution calling for a commission to study social insurance and make proposals to the Congress. London, a distant cousin of mine, was a founder of the Socialist Party of America with Eugene Debs. He also was legal counsel to many unions, some of which opposed government-sponsored social insurance. The crusty Samuel Gompers, the head of the American Federation of Labor, was especially problematic. He argued that if workers were better paid, they would pay for their own insurance, that unions not the government should insure workers, and that government insurance would undermine worker "manliness."

London handled Gompers diplomatically but firmly at hearings in April 1916, and won the unanimous support of Democrats and Republicans on the House Labor Committee. Surprisingly, he got that unanimous support because in 1916 his ideas were not far ahead of mainstream American views. Leaders of both parties believed that social insurance including health insurance was "inevitable." His measure reached the House floor in February 1917. He had modified it so that it did not determine in advance what the Commission would recommend. He also told Members that "the experience of other countries [could] guide [them] only in so far as the legislation of other nations can be made applicable to American conditions." On this flexible basis, he secured bipartisan backing. He was, however, 29 votes short of the two thirds needed to suspend the rules and have a "yes or no" vote, and the 64th Congress was about to adjourn. London was confident, however, that the groundwork had been laid and that he would succeed in the next Congress.

He was confident because he thought President Woodrow Wilson, just reelected to his second term, would give social insurance higher priority. Wilson had referred to healthcare in his first inaugural address in 1913, talking about finding the appropriate government role in it, but had not pushed this reform. The western Populist wing of the Democratic Party was with London and Democrats from big city political machines also backed him because they were competing with Republican "progressives" and Socialists for the votes of working people.

Many Republicans also backed London in the Committee and on the House floor. Theodore Roosevelt and his Progressive "Bull Moose" wing of the party had called for sickness and other forms of social insurance in 1912, borrowing explicitly from Bismarck and the socialists.

So why did health insurance fail when there was a bipartisan majority for it in 1916 and 1917? Because London's timing was very bad. It came to the House floor just weeks before the U.S. entered World War I, which totally eclipsed social measures. Overnight, Germany, which had been seen as the most advanced country in the World in medicine, science, industry, literature, music, and social policy became anathema.

The Bolshevik Revolution in Russia was the second blow. There was a "Red Scare" in the U.S. that equated any government role in healthcare with Communism. A democratic socialist government led by Alexander Kerensky replaced the Czar in March 1917. President Wilson asked London for his advice because he was born in Russia and a recognized expert on that country in the Congress. London urged Wilson to support the moderate Kerensky as the best hope for blocking the Communists. Armed intervention, he told Wilson, would drive the Russian people into their arms, but the U.S. joined with France and England in intervening anyway.

In a nutshell, health insurance was a casualty of World War I. Admiration for Bismarck's program was replaced by a strident anti-German chauvinism. Republican and Democratic conservatives and reactionaries recaptured the two great American political parties in the elections of 1918 and 1920, displacing progressive leaders in both.

American progressives before World War I had seen the U.S. advancing with Europe toward a gentler industrial democracy. The war ended that vision and Europe lost credibility. When the Crash of 1929 and the Great Depression brought progressives back into power, FDR still had to play down any European or socialist influences no matter how benign on his programs.

Meyer London's proposal morphed into the New Deal's "social security" program in 1935. London had died tragically in 1926, but his allies from New York politics and social reform efforts backed the New Deal. FDR however dropped health insurance from the social security package at the last minute fearing that the American Medical Association would torpedo it if health insurance was included. Later efforts by Presidents Harry Truman, Lyndon Johnson, and Bill Clinton to pass universal health insurance came up short. Johnson came the closest, passing Medicare and Medicaid legislation because he made it a priority and had a stronger majority in Congress than Truman or Clinton.

This history is relevant today. President Bush's failures have discredited the reactionary "brand." A new progressive era may be at hand. There is the possibility of a large majority in Congress for comprehensive health insurance and a president committed to such a program tailored to "American conditions." The question is whether attacks on "socialized medicine" and the reluctance Americans have long had to linking themselves to the experience of Europe still carry the weight they have carried for the past 90 years. The same arguments will be made, but it could be that the timing is right now.