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Business Interests and the Shape of the U.S. Welfare State: From the Insurance Company Model to Comprehensive Reform

  • Christy Ford Chapin (a1)
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Peter Swenson's excellent article is a welcome correction to the consensus argument so often found in welfare state literature. That interpretation depicts a never-ending, dualistic struggle between capitalists and “the people,” as represented by welfare reformers. Swenson sorts through the evidence surrounding post-1960 health care debates, particularly Medicare, to demonstrate that “business” is not a fixed, homogeneous group that conforms neatly to class-based analysis. He finds significant business backing for federal programming and also shows that where trade associations took conservative, anti-reform stands, they often did so without strong member support.

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1. Swenson, Peter A., “Misrepresented Interests: Business, Medicare, and the Making of the American Health Care State,” Studies in American Political Development 32, no. 1 (2018):123.

2. Additional works that demonstrate the variety of political positions among business leaders, including support for government programing include Swenson, Peter A., Capitalists against Markets: The Making of Labor Markets and Welfare State in the United States and Sweden (New York: Oxford University Press, 2002); Collins, Robert M., The Business Response to Keynes, 1929-1964 (New York: Columbia University Press, 1982); Phillips-Fein, Kim and Zelizer, Julian E., “What's Good for Business,” in What's Good for Business: Business and American Politics since World War II, ed. Phillips-Fein, Kim and Zelizer, Julian E. (Oxford, UK: Oxford University Press, 2012), especially 9–10; John, Richard R., “Adversarial Relations? Business and Politics in Twentieth Century America,” in John, and Phillips-Fein, Kim eds., Capital Gains: Business and Politics in Twentieth-Century America (Philadelphia: University of Pennsylvania Press, 2016), especially 20–21; Martin, Cathie Jo, Stuck in Neutral: Business and the Politics of Human Capital Investment Policy (Princeton, NJ: Princeton University Press, 1999); Mizruchi, Mark S., The Fracturing of the American Corporate Elite (Cambridge, MA: Harvard University Press, 2013): 240–41.

3. Swenson, “Misrepresented Interests,” 1. For class-based interpretations that emphasize consistent business power, see, for example, Hacker, Jacob S., Winner-Take-All Politics: How Washington Made the Rich Richer—and Turned its Back on the Middle Class (New York: Simon & Schuster, 2011); Lindblom, Charles E., Politics and Markets: The World's Political-Economic Systems (New York: Basic Books, 1977); Pierson, Paul, Dismantling the Welfare State?: Reagan, Thatcher, and the Politics of Retrenchment (Cambridge, UK: Cambridge University Press, 1994); Korpi, Walter, The Democratic Class Struggle (London: Routledge, 1983).

For accounts that explain how businesses win political influence, whether from the state of the economy or from public opinion, see Vogel, David, Fluctuating Fortunes (New York: Basic Books, 1989); Smith, Mark A., American Business and Political Power: Public Opinion, Elections, and Democracy (Chicago: University of Chicago Press, 2000).

4. Schattschneider's actual quote is new policies create new politics,” in Schattschneider, E. E., Politics, Pressures, and the Tariff (Manchester, NH: Ayer, 1974), 288.

5. On the social embeddedness of markets, see Polanyi, Karl, The Great Transformation: The Political and Economic Origins of Our Time (Boston: Beacon Press, 1944).

6. For works on public-private governance, see Balogh, Brian, The Associational State: American Governance in the Twentieth Century (Philadelphia: University of Pennsylvania Press, 2015); Mettler, Suzanne, The Submerged State: How Invisible Government Politics Undermine American Democracy (Chicago: University of Chicago Press, 2011); McQuaid, Kim, Uneasy Partners: Big Business in American Politics, 1945-1990 (Baltimore, MD: Johns Hopkins University Press, 1993); Hacker, Jacob, The Divided Welfare State: The Battle over Public and Private Social Benefits in the United States (New York: Cambridge University Press, 2002), 237–40, 228–29; Chapin, Christy Ford, “The Politics of Corporate Social Responsibility in American Health Care and Home Loans,” Business History Review 90 (Winter 2016): 654–55.

7. Howard, Christopher, The Hidden Welfare State: Tax Expenditures and Social Policy in the United States (Princeton, NJ: Princeton University Press, 1999): chaps. 2 and 3. At the same time, government-backed mortgages promoted racial segregation in housing. See, for example, Jackson, Kenneth T., Crabgrass Frontier: The Suburbanization of the United States (New York, 1985); Sugrue, Thomas J., The Origins of the Urban Crisis: Race and Inequality in Postwar Detroit (Princeton, 1996); Freund, David M. P., Colored Property: State Policy and White Racial Politics in Suburban America (Chicago: University of Chicago Press, 2007).

8. Hacker, Divided Welfare State, 237–40, 228–29; Gordon, Colin, Dead on Arrival: The Politics of Health Care in Twentieth-Century America (Princeton, NJ: Princeton University Press, 2004), chap. 2. Note that employers favored worker benefits provision when they viewed it as a means of undermining labor unions and a robust welfare state. This calculation changed with rising health care costs.

9. Morgan, Kimberly J. and Campbell, Andrea Louise, The Delegated Welfare State: Medicare, Markets, and the Governance of Social Policy (New York: Oxford University Press, 2011).

10. Chapin, Christy Ford, Ensuring America's Health: The Public Creation of the Corporate Health Care System (New York: Cambridge University Press, 2015).

11. Chapin, Ensuring America's Health, chap. 1.

12. Chapin, Ensuring America's Health, 31–34, 56–59, 91–92, 113–19, 138–39.

13. Beito, David T., From Mutual Aid to the Welfare State: Fraternal Societies and Social Services, 1890-1967 (Chapel Hill: University of North Carolina Press, 2000); Rosen, George, “Contract or Lodge Practice and Its Influence on Medical Attitudes to Health Insurance,” American Journal of Public Health 67 (April 1977): 374–78.

14. Klein, Jennifer, For All These Rights: Business, Labor, and the Shaping of America's Public-Private Welfare State (Princeton, NJ: Princeton University Press, 2006); Murray, John E., Origins of American Health Insurance: A History of Industrial Sickness Funds (New Haven, CT: Yale University Press, 2007); Krajcinovic, Ivana, From Company Doctors to Managed Care: The United Mine Workers’ Noble Experiment (Ithaca, NY: Cornell University Press, 1997).

15. Starr, Paul, The Social Transformation of American Medicine: The Rise of a Sovereign Profession and the Making of a Vast Industry (New York: Basic Books, 1982), 200206; Brandes, Stuart D., American Welfare Capitalism, 1880–1920 (Chicago: University of Chicago: 1976), 92102; The Committee on the Costs of Medical Care (hereinafter CCMC), Medical Care for the American People, no. 28 (Chicago: University of Chicago Press, 1932), 8081; Hendricks, Rickey, A Model for National Health Care: The History of Kaiser Permanente (New Brunswick, NJ: Rutgers University Press, 1993).

16. Starr, Social Transformation of American Medicine, 302–304; Grey, Michael R., New Deal Medicine: The Rural Health Programs of the Farm Security Administration (Baltimore, MD: Johns Hopkins University Press, 2002), 14–15, 42–47, 5357.

17. CCMC, Medical Care for the American People, 103–44; Starr, Social Transformation of American Medicine, 261–66.

18. Starr, Social Transformation of American Medicine, 200–213,301–5, 321–27; Chapin, Ensuring America's Health, 18–20; Klein, For All These Rights, 122–25, 130–31; Mary Ross, “The Case of the Ross-Loos Clinic,” Survey Graphic, June 1935, 300, 304.

19. Chapin, Ensuring America's Health, 20–25, 27–29.

20. Chapin, Ensuring America's Health, 41–43.

21. Quote of Representative Charles Plumley (R-VT) in A Socialistic Proposal,” Connecticut State Medical Journal 10 (January–December, 1946): 36.

22. Chapin, Ensuring America's Health, 74. See also Quadagno, Jill, One Nation Uninsured: Why the U.S. Has No National Health Insurance (New York: Oxford University Press, 2006), chap. 1.

23. Commerce, Chamber of, You and Socialized Medicine (Washington, DC, 1948), 17; Quadagno, One Nation Uninsured, 37–38.

24. Gordon, Dead on Arrival, chap. 2; Hacker, Divided Welfare State, 228–29; Chapin, Ensuring America's Health, 44–45; Gottschalk, Marie, The Shadow Welfare State: Labor, Business, and the Politics of Health Care in the United States (Ithaca, NY: Cornell University Press, 2000), chap. 2.

25. Hacker, Divided Welfare State, 237–40.

26. Cunningham, Robert III and Cunningham, Robert M. Jr., The Blues: A History of the Blue Cross and Blue Shield System (Dekalb: Northern Illinois University Press, 1997), 9597. Contrary to scholars who argue that commercial companies “cherry picked” relatively healthy employer groups and left nonprofit plans to cover individual subscribers, my research found that commercial firms created a robust individual-purchase market to help them in their political battle against reform. Chapin, Ensuring America's Health, 117–18.

27. Chapin, Ensuring America's Health, 31–34, 56–59, 91–92, 113–19.

28. Chapin, Ensuring America's Health, 119–21, 154–184; Klein, For All These Rights, 217–18, 242–43; Rothman, David J., “The Public Presentation of Blue Cross, 1935–1965,” Journal of Health Policy, Politics, and Law 16 (Winter 1991): 684–87.

29. Collins, Business Response to Keynes, 85–96, 129–41; McQuaid, Uneasy Partners; Chapin, “Politics of Corporate Social Responsibility,” 654.

30. Fein, Rashi, Medical Care, Medical Costs: The Search for a Health Insurance Policy (Cambridge, MA: Harvard University Press, 1986), 55; Chapin, Ensuring America's Health, 197.

31. Fein, Medical Care, Medical Costs, 55–56; Chapin, Ensuring America's Health, 197–99, 206.

32. Fein, Medical Care, Medical Costs, 60.

33. Chapin, Ensuring America's Health, 206–207, 223–24.

34. Swenson, “Misrepresented Interests,” 15.

35. By 1965, these Republicans supported policies beyond the 1960 Kerr-Mills Act, which directed federal funds to state programs to provide the indigent elderly with medical services.

36. Chapin, Ensuring America's Health, 205–205. Some fiscally conservative policymakers preferred Social Security financing over general revenue funding, believing that correlating federal benefits to payroll taxes would limit program expansion.

37. Chapin, Ensuring America's Health, 225.

38. Swenson, “Misrepresented Interests,” 7, 9–13; Chapin, Ensuring America's Health, 210.

39. Similarly, labor officials—always savvy about the inner workings of the health care market—understood that insuring retirees drained considerable resources away from younger workers. Swenson, “Misrepresented Interests,” 8–9, 12.

40. Derthick, Martha, Policymaking for Social Security (Washington, DC: Brookings Institute Press, 1979), 137–39; Chapin, Ensuring America's Health, 98–99.

41. Chapin, Ensuring America's Health, 217–19; Orville F. Grahame to Eugene Thore, April 13, 1960, Box 20, Orville Francis Grahame Papers, University of Iowa Special Collections, Iowa City, IA (hereinafter Grahame Papers); “Minutes of the Meeting of the ALC-LIAA Joint Committee on Social Security and Health Care,” March 29, 1961, Box 20, Grahame Papers.

42. Founded by hospitals, Blue Cross paid for hospitalization insurance, while Blue Shield plans, largely established through medical societies, covered physician bills. Owing to its association with hospitals, which traditionally relied on charitable and government funding to operate, Blue Cross was relatively progressive compared to the AMA-influenced Blue Shield. As Blue Shield developed, however, it increasingly pulled away from the AMA, behaving much as other insurance companies did regarding political stands in favor of reform and in instituting cost containment measures. See Cunningham and Cunningham, The Blues, and Chapin, Ensuring America's Health, chap. 5.

43. On the relative progressivism of northeastern insurers in comparison to other elements of the industry, see Derthick, Policymaking for Social Security, 139–42; Chapin, Ensuring America's Health, 218–19.

44. Chapin, Ensuring America's Health, 217.

45. Hacker, Divided Welfare State, 83–84; Chapin, Ensuring America's Health, 217–20, 228–29; Reminiscences of Reinhard Hohaus, part I, (July 27, 1965), 133, Social Security Project, Columbia Center of Oral History Collection, Columbia University, New York, NY; John W. Spillane to Orville Grahame, “Hearings Held before the House Ways and Means Committee on H.R. 4222,” August 4, 1961, Box 21, Grahame Papers; Marjorie Hunter, “Showdown Nears on Aged-Care Bill,” New York Times, January 26, 1964; “Insurer Backs Medicare Plan,” Journal of Commerce (May 28, 1962), Box 29, Grahame Papers.

Ivan A. Nestingen, “Speech to Annual Delegates Meeting of Group Health Mutual, Inc.,” March 13, 1965, Box 346, Secretary's Subject Correspondence, 1956–74, Department of Health, Education, and Welfare (HEW), RG 235, National Archives, College Park, MD (hereinafter NARA); Robert Ball, “Staff Paper on the Limitations of Private Health Insurance for the Aged,” October 15, 1963, Box 299, Commissioner's Correspondence, 1939–69, Social Security Administration (SSA), RG 47, NARA; Horace H. Wilson, J. Henry Smith, and Morton D. Miller, “Medicare and Private Benefit Plans,” n.d., Box 10, Harrison Givens Files, RG 2, AXA Equitable Life Insurance Company Archives, New York, NY.

46. Orville F. Grahame to Benjamin B. Kendrick, June 13, 1961, Box 21, Grahame Papers; “Minutes of the Meeting of the ALC-LIAA Joint Committee on Social Security and Health Care,” June 8, 1961, Box 20, Grahame Papers; “Minutes of the Meeting of the ALC-LIAA Joint Committee,” February 16, 1961, Box 20, Grahame Papers.

47. Chapin, Ensuring America's Health, 221–23; Cunningham and Cunningham, The Blues, 141–43; “Blue Cross Participation in Social Security Hospital Insurance,” April 28, 1964, Cohen Papers, Social Security Archives, Baltimore, MD; Walter J. McNerney, interview by Odin W. Anderson, transcript, June 13, 1973, Robert M. Cunningham Jr. Papers, private collection, Gaithersburg, MD (hereinafter, Cunningham Papers); Blue Cross Association Annual Meeting, Chicago, April 20, 1961, Cunningham Papers.

48. The Blues lost their federal tax exemption during the 1980s, and their trade association, the Blue Cross and Blue Shield Association, permitted plan members to convert to for-profit companies during the 1990s.

49. Chapin, Ensuring America's Health, chap. 7; Morgan and Campbell, Delegated Welfare State. In 1992, Don Cohodes, a vice president of the Blue Cross and Blue Shield Association, told an interviewer that his “back-of-the-envelope scribbling” indicated that acting as Medicare intermediaries added approximately $200 million annually to total plan revenues. “That's not chicken feed,” he observed. Don Cohodes, transcript, July 21, 1992, Cunningham Papers.

50. See Martin, Stuck in Neutral, 95–97, for a discussion of how a range of factors—size, profitability, health care expenditures, and unionization—helped determine which businesses were most likely to back health care reform.

51. Mizruchi, Fracturing of the American Corporate Elite, 240–41.

52. Bergthold, Linda, “The Fat Kid on the Seesaw: American Business and Health Care Cost Containment, 1970-1990,” Annual Review of Public Health 12 (1991): 161–64; Chapin, Ensuring America's Health, 234–35. See also Bergthold, Linda, Purchasing Power in Health: Business, the State, and Health Care Politics (New Brunswick, NJ: Rutgers University Press, 1990).

53. Bergthold, “Fat Kid on the Seesaw,” 159–61.

54. Bergthold, “Fat Kid on the Seesaw,” 163–64; Peter Kihss, “Business Leaders Focus on Health,” New York Times, November 9, 1969; William Greider, “New Health Insurance Plan Urged,” Washington Post, April 12, 1973; Edward M. Kenney, “Braking Medical Inflation through National Health,” The Sun, August 6, 1978.

This analysis fits with Peter Swenson's and Scott Greer's contention that rising health care costs in the private sector condition business interests to be more favorable toward reform. Swenson, Peter and Greer, Scott, “Foul Weather Friends: Big Business and Health Care Reform in the 1990s in Historical Perspective,” Journal of Health Policy, Politics, & Law 27 (August 2002): 605–38.

55. “2 Groups Oppose Federal Insurance on Health as Costly,” New York Times, October 27, 1971; Art Pine, “Cost of Health Plan Raises Fears of Harm to Business,” The Sun, April 8, 1971.

56. Waterhouse, Benjamin C., Lobbying America: The Politics of Business from Nixon to NAFTA (Princeton, NJ: Princeton University Press, 2014), 25; Eve Edstrom, “Compulsory Health Plan Urged by Rockefeller,” Washington Post, April 25, 1968; Nancy Hicks, “Health Coverage Urged by Public,” New York Times, December 18, 1975.

57. Morone, James A., The Heart of Power: Health and Politics in the Oval Office (Berkeley: University of California Press, 2009), 231–32; Cunningham and Cunningham, The Blues, 187; James J. Kilpatrick, “Nixon Health-Care Package Has Conservative Appeal,” The Sun, March 2, 1971; Victor Cohn, “Nixon Proposed Broad Changes in Health Care: President Cites ‘Crisis’ in Costs,” Washington Post, February 19, 1971.

58. Mizruchi, Fracturing of the American Corporate Elite, 172–73, 242; Greider, “New Health Insurance Plan Urged”; Harold M. Schmeck, “Business Panel Presents Health Plan,” New York Times, April 12, 1973.

59. “U.S. Chamber to Offer Own Insurance Plan,” Washington Post, January 26, 1974.

60. Mizruchi, Fracturing of the American Corporate Elite, 243.

61. Stuart Auerbach, “New Health Program Called Too Expensive,” Washington Post, February 4, 1976; Starr, Social Transformation of American Medicine, 404; “Study Sees 40% Rise in Health-Care Costs by 1980 Even without National Program,” Wall Street Journal, October 18, 1976; Richard D. Lyons, “Despite Broad Coverage of Nixon's New Health Insurance Plans, Critics Say It Has Serious Flaws,” New York Times, February 8, 1974.

62. The 1970 Kennedy-Griffiths legislation was the only major proposal that sought to remove insurance companies from the health care system. Nonetheless, Blue Cross and Blue Shield leaders worked with the bill's sponsors to create an administrative role for insurers. Starr, Social Transformation of American Medicine, 394, 404.

63. Chapin, Ensuring America's Health, 235; Cunningham and Cunningham, The Blues, 193–95.

64. Chapin, Ensuring America's Health, 238–39; Republican Task Force on National Health Care Hears HIA Spokesman,” National Underwriter 76 (March 11, 1972): 14; Health Care Delivery in the 1970's,” Transactions of Society of Actuaries 22 (January 1970): D55–308; Victor Cohn, “Insurance Firms Offer Counterplan to Nixon's National Health Proposal,” Washington Post, March 17, 1971.

65. Cunningham and Cunningham, The Blues, 187–93; “Report of the Chairman” and “Report of the President” (1974 Annual Business Meeting of Blue Shield Plans), Cunningham Collection; Interview with Walter J. McNerney, interview by Lewis E. Weeks, 1979-1980, transcript, Hospital Administration Oral History Collection, Library of the American Hospital Association; George Heitler interview by Odin W. Anderson, 1973, transcript, Cunningham Collection.

66. Interview with Walter J. McNerney, 71–72, Cunningham Collection for quotes.

67. Chapin, Ensuring America's Health, 235–36, 241–42.

68. “Report of the President,” Annual Business Meeting of Blue Shield Plans (1976), 18–19, Cunningham Collection; Interview with Harold Pearce, June 11, 1973, transcript, 10–14, Cunningham Collection.

69. Chapin, Ensuring America's Health, 239; Campion, Frank D., The AMA and U.S. Health Policy since 1940 (Chicago: Chicago Review Press, 1984), 306–11, 316–19, 322–24.

70. See Martin, Stuck in Neutral, chaps. 3 and 5, for how business employment of policy experts, associational patterns, and past policy positions also shaped attitudes toward the Clinton health care proposal.

71. Martin, Stuck in Neutral, chap. 3; Milt Freudenheim, “Calling for a Bigger U.S. Health Role,” New York Times, May 30, 1989; Frank Swoboda, “Major Firms, Unions Join in National Health Insurance Push,” Washington Post, March 14, 1990; Robert Pear, “Business and Labor Call for Health Tax,” New York Times, November 13, 1991.

72. Martin, Stuck in Neutral, 186–87; Morone, James A., Litman, Theodor J., Robins, Leonard S., Health Politics and Policy, 4th ed., (Clifton Park, NY: Delmar Cengage Learning, 2008), 299; John Judis, “Abandoned Surgery: Business and the Failure of Health Reform,” The American Prospect (Spring 1995), http://prospect.org/article/abandoned-surgery-business-and-failure-health-reform.

73. Robin Toner, Adam Clymer, and Robert Pear, “The Health Care Debate: What Went Wrong?” New York Times, August 29, 1994.

74. Swenson and Greer, “Foul Weather Friends.” Employers initial enthusiasm for managed care reversed once health care costs started to rise again during the mid-1990s.

75. Martin, Stuck in Neutral, 178–81; Judis, “Abandoned Surgery”; Toner et al., “The Health Care Debate.”

76. Judis, “Abandoned Surgery”; Martin, Stuck in Neutral, 60.

77. By the late 1980s, 99 percent of NAM members provided employee health insurance. Morone et al., Health Politics and Policy, 299.

78. Morone et al., Health Politics and Policy, 299; Martin, Stuck in Neutral, 176–77.

79. Weil, T. P., “President Clinton's managed competition proposal,” Journal of the National Medical Association 85 (April 1993): 257–63; Skocpol, Theda, Boomerang: Health Care Reform and the Turn against the Government (New York: W.W. Norton, 1996), 134139; Cunningham and Cunningham, The Blues, 250; William Neikirk, “Insurers Weigh Profit, Health Critics Fear Clinton Plan May Give Big Firms Too Much Power,” Chicago Tribune, December 5, 1993; Sara Nichols, “Clinton Plan Rewards Big Insurers,” New York Times, November 7, 1993; Milt Freudenheim, “Insurance Companies Expect Battle over Health Care to Shift to the States,” New York Times, October 23, 1994.

80. John J. Fialka, “Washington Battle for Health Reform Showed Possible Erosion of Blue Cross-Blue Shield Clout,” Wall Street Journal, Mary 6, 1993; Greg Steinmetz, “Number of Blue Cross Insurance Plans May Shrink under Health-Care Reform,” Wall Street Journal, June 29, 1993; Peter Kerr, “Insurers Fear They'd Be the Big Loser in a World of Managed Health Care,” New York Times, October 1, 1993.

81. Kerr, “Insurers Fear They'd Be the Big Loser”; Judis, “Abandoned Surgery.”

82. Paul Starr, “What Happened to Health Care Reform?” The American Prospect (Winter 1995), http://prospect.org/article/what-happened-health-care-reform; Neikirk, “Insurers Weigh Profit”; Dana Priest and Michael Weisskopf, “AMA Split on Clinton Health Plan,” Washington Post, December 6, 1993.

83. Rick Ungar, “Newt Gingrich Long-Time Supporter of Health Insurance Mandates,” Forbes, May 13, 2001, https://www.forbes.com/sites/rickungar/2011/05/13/newt-gingrich-long-time-supporter-of-health-insurance-mandates/#4db323e52153; Jonathan Easley, “Romney Describes Healthcare Mandate as Conservative Principle,” The Hill, December 28, 2011, http://thehill.com/video/campaign/201489-romney-says-universal-healthcare-is-a-conservative-principle.

84. Roundtable, Business, Health Care Costs in America: A Call to Action for Covering the Uninsured (Washington, DC: Business Roundtable, June 2007); Jonathan Cohn, “What's the One Thing Big Business and the Left Have in Common?” New York Times Magazine, April 1, 2007; Jordan Rau, “Universal Healthcare Gains Unlikely Backer,” Los Angeles Times, May 7, 2007; Mark Trumbull, “Burdened by Healthcare Costs, US Businesses Seek a Shift,” Christian Science Monitor, February 13, 2007; Daniel Costello and Abigail Goldman, “Healthcare Reform Calls Get Louder,” Los Angeles Times, February 8, 2007.

85. Business Roundtable, Health Care Costs in America.

86. Kolb quotation in “Six Major Corporations Join Better Health Care Together,” Health & Wellness at Walmart.com, https://corporate.walmart.com/_news_/news-archive/2007/05/08/six-major-corporations-join-better-health-care-together-governors-rendell-schwarzenegger-cite-importance-of-the-coalitions-efforts-at-summit. See also “CED Releases Quality, Affordable Health Care for All: Beyond the Employer-Based Health-Insurance System,” CED Forum (Winter 2008): 1–2.

87. The AMA also registered concerns about the Independent Payment Advisory Board and sought a permanent fix to Medicare fees, which, though scheduled to automatically drop, had in past years been repeatedly raised by Congress. Starr, Paul, Remedy and Reaction: The Peculiar American Struggle over Health Care Reform (New Haven, CT: Yale University Press, 2011), 114, 203, 206; Chapin, Ensuring America's Health, 244; Dan Eggen, “Familiar Players in Health Bill Lobbying,” Washington Post, July 6, 2009; Tom Hamburger and Kim Geiger, “Insurers Poised for a Healthy ‘Bonanza,’” Chicago Tribune, August 24, 2009; Robert Pear, “Insurers Seek Presence at Health Care Sessions,” New York Times, December 17, 2008; Noam Levey, “Obama Health Care Overhaul Gets Boost,” Baltimore Sun, May 11, 2009; Kim Geiger and Tom Hamburger, “Doctors Go for Obama's Reform,” Los Angeles Times, September 15, 2009.

88. “Health Policy Brief: Individual Mandate,” January 13, 2010, Health Affairs accessed at https://www.healthaffairs.org/do/10.1377/hpb20100113.974560/full/; Tom Hamburger and Kim Geiger, “Healthcare Insurers Get Upper Hand,” Los Angeles Times, August 24, 2009; Robert Pear, “Insurers Offer to Soften a Key Rate-Setting Policy,” New York Times, March 25, 2009; Dan Eggen, “Health-Care Firms Have Supported Lawmakers Debating Reform,” Washington Post, July 21, 2009, http://www.washingtonpost.com/wpdyn/content/article/2009/07/20/AR2009072003363.html?sid=ST2009072003679.

89. Eggen, “Familiar Players in Health Bill Lobbying”; Hamburger and Geiger, “Healthcare Insurers Get Upper Hand; Pear, “Insurers Seek Presence at Health Care Sessions.”

90. This proportion is referred to as the medical loss ratio (MLR). America's Health Insurance Plans, AHIP Statement on MLR (Washington DC: AHIP, November 23, 2010). Brill, Steven, America's Bitter Pill: Money, Politics, Backroom Deals, and the Fight to Fix Our Broken Healthcare System (New York: Random House, 2015), 119–22.

91. Brill, America's Bitter Pill, 107–109, 143, 186–87.

92. Avery Johnson and Janet Adamy, “U.S. News: Signs of a Split Emerge in Insurance Industry,” Wall Street Journal, October 15, 2009; Hamburger and Geiger, “Healthcare Insurers Get Upper Hand.” Some large Blue Cross companies, such as WellPoint, that had invested heavily in the individual and small-group market, also saw the reform legislation as a threat. Reed Abelson, “A Scrappy Insurer Wrestles with Reform,” New York Times, May 16, 2010.

93. Starr, Remedy and Reaction, 218–19; Swenson, “Misrepresented Interests,” 22; Rick Ungar, “Busted! Health Insurers Secretly Spent Huge to Defeat Health Care Reform While Pretending to Support Obamacare,” Forbes.com (June 25, 2012), https://www.forbes.com/sites/rickungar/2012/06/25/busted-health-insurers-secretly-spent-huge-to-defeat-health-care-reform-while-pretending-to-support-obamacare/#62da89164248

94. Chapin, Ensuring America's Health, chap. 8; Steven Brill, America's Bitter Pill.

95. Note that the 1974 Employee Retirement Income Security Act (ERISA) allowed large employers to self-insure their employee groups and thereby skirt state regulations that might, for example, require certain expensive policy benefits like drug and alcohol treatment. Even with self-insurance, however, these employee groups were run on the same insurance company model, with the same financing relationship between service providers and third-party financiers. Indeed, many insurance companies established third-party administration firms to offer administrative services to large self-insured employee groups.

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