Health Insurance and Social Solidarity

As was evident in the European sickness funds, the insurance compact expresses an underlying solidarity among insurance pool subscribers. Persons facing a common vulnerability organize into a group whose shared resources, built up from relatively small individual contributions, will assist members who suffer financial loss as a result of illness or injury. Since the anticipated harm is a matter of probability, the group that pools its resources must be large enough and composed of persons with sufficiently variable risk levels so that, in a given period of time covered by the contributions (or premiums), only a minority of those at risk will actually experience illness or injury. The majority will contribute without needing to draw on the pooled resources. Those who do not encounter harm stand in a relationship of fiscal solidarity with those who do. The smaller the group, the more vulnerable it is to being overwhelmed by a small number of very large claims. If the group includes a large number of persons with high probability of need (the elderly, for example), a high level of member contributions will be required to guarantee adequate resources to cover every claim.

In addition to the purely fiscal relationship among contributors, reigning social and political ideas affect the conscious feelings of solidarity they experience as members of an insured group. Compulsory sickness insurance for workers, providing for both lost wages and the cost of medical care, was first organized at a national level in 1883 in Germany by the conservative chancellor Otto von Bismarck as a defensive maneuver against the rising influence of the German Social Democratic Party. As Paul Starr noted in his 1982 work, Bismarck believed workers were less likely to demand more radical reforms if certain harsh realities of the industrial revolution could be tempered with benevolence flowing from the monarchy.

In the closing decades of the nineteenth century, several other European nations took similar actions to protect workers' vulnerability, but the United States showed little interest in the idea until the Progressive reformers began to press the issue in the early years of the twentieth century (Hirshfield). They promoted compulsory health insurance as a form of enlightened self-interest on the part of the middle class: The survival of individual freedoms essential to capitalism required taming the tendency of free enterprise to pursue profit without concern for the precarious circumstance ofwage laborers. Robert N. Bellah, et al. (1985) noted that the vocabulary of individualism typical of the culture of private consumption has shaped public discourse about health insurance in the United States, and the concept of social solidarity is only faintly evident in the debate that has evolved since the early twentieth century (Churchill).

In some societies, social consciousness about health insurance sees it as a component of the nation's system of social insurance—that is, a public guarantee that certain basic human needs will be met at some minimum level for all members of the community. This has typically been the meaning of health insurance in Western Europe. Conversely, health insurance may be seen as a marketable service properly residing in the private sector, which has been the dominant, though not unanimous, social understanding in the United States (Greenlick, 1988).

The Progressives' compulsory insurance campaign had failed prior to 1920, and by the late 1930s, the idea of voluntary health insurance for workers as a fringe benefit of employment had taken over as the prevailing rationale for social change. The appeal of voluntary insurance, supported by tax subsidies for employers and workers, was fully compatible with the Progressives' individual freedoms argument. Indeed, the voluntary approach seemed capable of solving the solidarity problem, as the percentage of the whole population with voluntary hospital insurance shot up from less than 10 percent in 1940 to 57 percent in 1950 and to nearly 90 percent by the early 1970s (Anderson). With health insurance spreading widely through the working community, yet systematically leaving those not in the workforce outside the fold, the idea of national health insurance based on explicit appeals to solidarity and social justice emerged periodically but each time failed to pass into law (Hirshfield; Starr).

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