On Monday, Feb. 20, I attended a forum on campus regarding the Affordable Care Act (which you can read about in my article located in this week’s News section). I would be lying if I said it was a particularly pleasant experience. I did meet some nice people, but mostly it was an opportunity for older, white, politically involved, liberal-minded people to congratulate themselves on how liberal they are.
I heard some interesting comments that I thought were a bit outlandish but received much praise: that criticizing the ACA “required alternate facts,” dissenters were “drinking the Kool-Aid,” and I even heard someone make enormous logical leaps as to claim the Constitution implied a positive right to healthcare (I promise you, it’s not in there, nor are any positive rights).
Healthcare has become a strongly salient issue in politics since former President Barack Obama began to push the ACA, which was met with extreme resistance from Tea Party Republicans. As with other issues I’ve written about, this debate is limited to a disappointingly small range—one side neglects that the problem exists, and the other offers a lackluster solution. This would only target symptoms and not the root of the problem, resulting in minimal improvements at best, at the cost of the freedom and autonomy of the majority of the country’s citizens.
We must acknowledge that many people are struggling to find insurance they can afford and that covers their necessary health problems. To ignore that this is an issue is to condemn many innocent people to painful deaths at a subprime age and creates a long-term expense for the rest of our society. However, our response to this issue, not just from the ACA, but for nearly a century, has been backwards and detrimental to our collective health.
Although this topic could cover an enormous paper, this is what the ACA does in short. The ACA requires that all Americans have health insurance (or they must pay a fine), that private insurance firms must provide services to people they would normally deny for reasons of risk (or pay a fine) and that employers with a certain number of employees must provide a healthcare plan to their employees (I’ll let you guess what happens if they don’t).
These policies have the arguably great intention of helping those who were unable to receive healthcare coverage under the previous arrangements because they had pre-existing conditions, which insurance companies don’t want to cover because it guarantees a large cost, whereas healthy people may never require large payments for treatment. Additionally, the ACA helps children and the disabled get healthcare more easily.
However, the problem that caused so many people to be in this position was not the lack of government regulation but the presence of regulation. Roderick Long, a professor at Auburn University, documented the history of changes in healthcare policy in the developed world in his essay “How Government Solved The Healthcare Crisis.” This is not referring to the ACA, but a different policy the U.S. and other governments passed nearly a century earlier, regarding the common form of health insurance called “lodge practice.”
In the 19th century, the primary source of health insurance for poor, working class and immigrant Americans were organizations called fraternal societies rather than traditional insurance companies. These organizations were comprised of many workers who would pool their money into a giant fund, which the organization would use to pay for treatment when their constituents needed it.
In the early 1900s, most workers would pay as little as a day’s wages ($1-2 at the time, perhaps around $25-50 today) per year for their health insurance! Each branch of such an organization was called a “lodge,” hence lodge practice. These lodges would negotiate contracts with doctors on behalf of their constituents for becoming the lodge’s primary care provider, and the high number of doctors relative to patients gave lodge organizations the bulk of the negotiating power. Lodges had the negotiating power to select the best doctors at the lowest price, and doctors were subject to their will, rather than the other way around.
The medical profession, of course, hated this. The doctors thought it was undignified to have to beg for contracts from poor minorities and foreigners for relatively low prices, but that was necessary to get a steady flow of patients. So, in the depth of the Great Depression, doctors lobbied the government to do something about low medical prices and an excess of medical care. Wrap your head around that!
As a result, the U.S. government took action to protect the doctors at the expense of the working class and poor. First, they increased taxes on everyone to pay for the social programs in the New Deal, the income of which was used to strengthen the government medical establishment. This caused many people to be unable to pay both the taxes and lodge fees, so lodges immediately lost much of their membership.
The government charged the American Medical Association with the sole ability to accredit doctors for legal practice, which artificially reduced the number of practicing doctors that lodges could potentially accept. Later, the AMA even banned doctors who would take on lodge contracts! Lodges nearly fell completely out of existence by the end of the Great Depression, and the only people who ended up better off were the state-privileged doctors and monopoly insurance corporations.
Within a decade, America became a country where doctors were at the mercy of the working class to just the opposite. Now, just a few insurance companies are available in each state since they cannot compete across state lines.
Fifty-two percent of all counties in the U.S. can only choose between at most two insurance providers, according to the Kaiser Family Foundation, which means they can charge exorbitant monopoly prices and deny service to whoever they please. All the ACA did was make them accept the riskier customers and pass the costs along to everyone else, while many people still have too high deductibles and premiums to even get any coverage from ACA funds.
Of course, with developments in medical technology and a massive expansion of the entirety of medical knowledge, even an immediate return to lodge practice wouldn’t allow everyone to get health insurance for just $50. But it’s completely clear that such a free market in healthcare would be far better than the single payer or a neoliberal system, before or after the ACA. If you’re wondering why we are in the depth of a healthcare crisis now that the ACA cannot fix, we can look to the words of Roderick Long: “Because government solved the last one.”
Alexander Habbart is a second-year student majoring in economics, math and finance. He can be reached at AH855541@wcupa.edu.