The Fair Society: It's Time to Complete FDR's New Deal with National Health Insurance

Back in 1932, in the depths of what had become notorious as “the Great Depression”, (triggered by the New York Stock Market crash in 1929), the Democratic Presidential candidate that year, Franklin D. Roosevelt, pledged himself to “a New Deal for the American people.”

When Roosevelt was elected (in a landslide), the government began to intervene in a major way in our free-market economy.   An “alphabet soup” of new government agencies imposed banking regulations, emergency hunger relief programs, unemployed worker relief programs (public works), and agricultural support programs. In a second phase of the New Deal, there was protection for labor unions, programs to aid tenant farmers and migrant workers, and a new social insurance program (“Social Security”) that was jointly financed by the government and by workers, in order to provide an “earned” retirement income for the recipients.  

Social insurance was originally conceived as a way to cover/protect everyone “from the cradle to the grave”, as the British prime minister Winston Churchill put it back in 1943 (a term that Roosevelt also used), although the basic idea goes back to the German Chancellor Otto von Bismarck’s health plan in the 1880s. However, in this country the American Medical Association (AMA), among others, fought vigorously against government health insurance, and so it was excluded from the original Social Security Act in 1935. 

Roosevelt revived the idea of “national health insurance” (as the British called their new plan) in 1944, during World War Two. In his annual “State of the Union” speech that year, Roosevelt called for an “economic bill of rights”, including “the right to adequate medical care”, although he did not immediately submit a plan/bill to Congress.  After Roosevelt died in office, the new President, Harry S Truman, picked up the call for national health insurance and arranged in late 1945 to have the so-called Wagner-Murray-Dingell bill introduced in Congress.  Committee Hearings were held, but, in part due to vigorous AMA opposition, the effort stalled. 

Nevertheless, the New Deal brought about a change in our public philosophy.  Ever since the 1930s, this country has expected our elected (democratic) governments to serve the “common good” or “public interest” – from fighting wars, and pandemics, to public education and public parks. One of our founding fathers, Benjamin Franklin, invented the cartoon of a snake cut into thirteen segments (one for each of the thirteen American colonies) with the slogan “Unite or Die”. This philosophy has, for the most part, prevailed over the past 250 years.  

However, many rich people in this country, including most of the top one percent, disagree. They see themselves as entitled to their money and resent being taxed to serve others. They don’t see our society as an interdependent, mutually supportive “community” but only as a transactional marketplace. The Russian émigré novelist, Ayn Rand, became the visible public spokesperson for this “libertarian” philosophy during the Twentieth Century.  In her various novels/diatribes, she idealized the rich and powerful and was hostile to the rest of society, rejecting any obligation to the supposed “moochers,” and “spongers,” and “parasites” who benefit from the creativity and enterprise of the few. Moreover, she saw government as a tool of the masses that suppresses the liberty of the creative class. That spirit remains alive and well among the radical right wing in this country even today. 

Nevertheless, the problem of how to pay for our increasingly expensive healthcare system in this country has, if anything, grown ever larger, especially for the poor and the elderly.  Accordingy, in the 1950s a proposal was developed to provide health care insurance for the elderly under Social Security. It was immediately opposed by the AMA but was embraced by the AFL-CIO (organized labor unions) and the then new National Council of Senior Citizens.  It too languished until 1961, when the new President, John F. Kennedy, took up the cause once more and reintroduced a bill calling for health insurance for the elderly through Social Security (now called Medicare). After President Kennedy’s assassination in 1963, the new President, Lyndon Johnson, finally saw Medicare passed into law in 1965. 

But this was only a start. What has evolved over the past 70 years can best be described as a hybrid public-private partnership with a patchwork of Federal and state programs, and with the for-profit sector (mainly private hospitals, health insurance providers and pharmaceutical companies) serving as the gatekeepers and price-setters. But over time this system has become ever more expensive (and less “affordable”) for many millions of our citizens. Medicaid, and the Affordable Care Act (commonly called Obama Care) were designed to subsidize health costs for low-income Americans. But now Obamacare has (apparently) been undermined.

“What is to Be Done?” – to borrow the famous title of a pamphlet by Vladimir Lenin prior to the Russian Revolution. Following an expected (and well deserved) Republican disaster in the 2026 mid-term election, there will likely be a major political climate change (and the needed votes in Congress) for a long overdue set of measures to finally achieve national health insurance (and more). Here is my own shopping list/recipe. It involves five important changes:

1. A Steep increase in the minimum wage – say to $20 per hour, a long overdue step to address poverty and affordability in general.
2. Expand Medicare into a program of “Medicare for All” (national health insurance) as various politicians (like Bernie Sanders) have advocated. This will also require major increases in worker contributions and personal tax increases (especially for the wealthy).
3. Require private companies that have a significant role in administering and/or supplementing Medicare to be not for profit. This will mitigate (eliminate) a major internal conflict of interest in a public benefit program.
4. Require pharmaceutical companies that serve Medicare beneficiaries to be not for profit, as a return for the major public support they receive for research and development.
5. Impose strong price regulations/caps for health care services and pharmaceuticals, a precedent that goes back to World War Two in this country.

With these measures, and perhaps others as well, we will finally, after almost 100 years, complete President Roosevelt’s New Deal. Better late than never. 

Peter Corning was the author of The Evolution of Medicare; From Idea to Law, (1969). Office of Research and Statistics, Social Security Administration (Research Report No 29), Washington, D.C.: U.S. Government Printing Office. Professor Corning taught for many years in the multi-disciplinary Human Biology Program at Stanford University. He is also the author of nine books and almost 200 professional journal articles and edited book chapters over the years.