The Wages of Sickness: The Politics of Health Insurance in Progressive America

Published by EH.NET (July 2001)

Beatrix Hoffman, The Wages of Sickness: The Politics of Health Insurance in

Progressive America. Chapel Hill: University of North Carolina Press,

2001. xiii + 261 pp. $39.95 (cloth), ISBN: 0-8078-2588-3; $17.95 (paper),

ISBN: 0-8078-4902-2.

Reviewed for EH.NET by Melissa A. Thomasson, Department of Economics, Miami

University.

Proposals for universal health insurance coverage in the United States have

been defeated several times over the course of the twentieth century — the

failure of Bill Clinton to enact comprehensive health insurance reform is a

failure shared by FDR and Harry Truman. In each instance, proponents of

compulsory insurance failed to overcome strong opposition, particularly from

physicians and insurance companies. Even earlier in the twentieth century, the

American Association for Labor Legislation (AALL) faced similar opposition to

the compulsory health insurance bills it sponsored in several states, and none

were ever enacted. Beatrix Hoffman, an assistant professor of history at

Northern Illinois University, examines the failure of the compulsory health

insurance movement in one of these states, New York, to provide a glimpse into

Progressive Era health politics. In so doing, she reveals how Progressive

failures solidified interest group opposition to state-sponsored health

insurance, and argues that this opposition may have doomed future attempts to

provide national insurance.

Hoffman tells the story of the American Association for Labor Legislation’s

failure to enact compulsory health insurance in New York over the period

1916-1920. While she is not the first to examine their state-level proposals

for health insurance during the period, she offers a fresh perspective on New

York’s experience, and uncovers interesting information about the forces that

shaped interest group politics in the Progressive Era.

The book is organized into eight chapters and an epilogue. In the first

chapter, Hoffman provides information about the situation of the typical wage

earner in the Progressive Era. Many workers had little money to pay for

medical care and had only a “patchwork of protection” that sheltered them from

economic insecurity in the event of illness. Missing from the chapter (and

from most of the book) is a discussion of the effectiveness of medical care

and the demand for health insurance in general. While most of the information

provided in the chapter is fairly well known, it sets the stage for readers

unfamiliar with the period.

Hoffman’s real contributions come after the first chapter. The second and

third chapters discuss the manner in which the AALL developed the foundation

for their compulsory insurance programs. Both chapters are well researched and

very detailed. For example, Hoffman brings to light the substantial role of

Olga Halsey, a young Wellesley graduate with a graduate degree from the London

School of Economics, who worked in London doing research on national health

insurance.

Hoffman also provides a broader institutional perspective on the AALL’s

development of health insurance than do other works on the subject. In the

second chapter, Hoffman first notes the failure of the AALL to court groups

that would be affected by their proposed legislation. This oversight is a

central theme in the book — chapter 4 is entitled “The Worst Insult to the

Greatest Profession,” and discusses how the AALL failed to include physicians

in the development of their model legislation. In chapter 5, Hoffman

similarly discusses how the needs and/or anxieties of employers and commercial

insurance companies were barely considered and their opposition seriously

underestimated. Both groups were liable to bear considerable costs associated

with the legislation. Employers would be required to contribute to the cost of

the insurance program, yet AALL reformers erroneously believed that employers

would come to support the bill (as they had workers’ compensation laws).

Despite the fact that commercial insurance companies were also a potentially

serious source of opposition, the AALL included burial insurance as one of

their proposed benefits, thus threatening one of the most profitable lines of

commercial insurance companies.

Hoffman also pays close attention to the role of other groups in opposing or

supporting the AALL’s efforts. She demonstrates that even seemingly

homogeneous groups had subgroups that thought very differently about

compulsory insurance. In chapter 6, she examines how organized labor viewed

the proposed legislation. Samuel Gompers publicly opposed compulsory

insurance, yet Hoffman shows how Gompers’ opinion was not shared by all labor

groups. In chapter 7, she provides a novel look at how the AALL’s proposal of

maternity benefits for women workers and the wives of insured workers divided

women in the Progressive Era. The debate over maternity benefits is set

against a rich political backdrop; Hoffman describes the political power

structure in New York and identifies competing interest groups. While some

women clearly supported the legislation, others opposed it for a variety of

reasons . Opponents included Florence Kelley, a noted activist, who believed

that maternity benefits would tax poorly paid single women and force pregnant

women into the labor force. Other women (such as women printers) opposed any

sort of maternalist legislation that may have dictated the terms of their

employment.

Overall, Hoffman’s book provides a detailed look at the various interest

groups that both supported and opposed plans for compulsory health insurance

in New York. She identifies competing interest groups and subgroups, and

clearly demonstrates the AALL’s failure to account for strong opposition.

While her book is well-researched and detailed on these points, it tends to

understate the fact that many Americans were relatively indifferent to the

AALL’s efforts, and that this many have seriously impacted the organization’s

success. As Odin Anderson notes, “the fight was between individual giants on

Olympus, to which the general public seemed to pay only passing interest”

(Anderson, The Uneasy Equilibrium: Private and Public Financing of Health

Services in the United States, 1875-1965, New Haven, 1968, p. 87). Keeping

this in mind, Hoffman’s book sheds light on a complex issue and is interesting

and informative for people interested in Progressive Era reforms.

Melissa Thomasson is assistant professor of economics at Miami University

(Oxford, Ohio) and does research on the economic history of health care and

health insurance.