The Limits of State Autonomy: The Medical Cooperatives of the Farm Security Administration, 1935-1946

Under the ominous title “Rehearsal for State Medicine,” the 17 December 1938 issue of the Saturday Evening Post told its readers about a new health program sponsored by the Farm Security Administration (FSA), a New Deal agency that provided low-interest “rehabilitation loans” to low-income farmers. As an outgrowth of the loan program, the FSA had established cooperative health plans that, for a small annual fee, allowed FSA clients to receive affordable health care. But according to the article’s co-authors—Samuel Lubell and Walter Everett—there was much more to the FSA health program. “What the FSA is doing,” Lubell and Everett claimed, “affords a rare glimpse into what the future might bring.” Their article appeared in the midst of a national debate over health care reform and only months after President Franklin Roosevelt had convened hundreds of doctors, social workers, and public health reformers for a National Health Conference. Charged with the task of making recommendations for a national health program, the conference produced a final report that suggested a range of public policies that might make health care more affordable and accessible. Most controversially, the final report called upon lawmakers to consider creating a program of government-sponsored health insurance. “Though Congress and the nation are debating the prickly issue of state medicine,” Lubell and Everett noted with obvious disapproval, “one Federal agency [the FSA] has jumped the legislative gun and initiated its own program of socialized medicine.” ¹

Although they would have rejected the term “socialized medicine,” the architects of the FSA health plans had indeed envisioned a “rehearsal” of sorts. Between 1935 and 1946, the FSA (and its predecessor, the Resettlement Administration) sponsored several different health care programs for its clients: from mobile clinics for migrant farm workers in Arizona and California to statewide medical corporations in the drought stricken Dakotas and a handful of wartime “experimental” programs scattered throughout the nation. Yet far more numerous were the hundreds of cooperative prepayment plans set up as county “medical aid associations.” At their peak in 1942, these countywide plans provided low-cost health insurance to about 115,000 farm families (representing more than 600,000 people) in 43 states. ² In their internal correspondence and public writings, FSA medical officers made it clear that the program had two objectives: first, to meet the immediate medical needs of FSA clients and thereby help to secure government loans; and second, but just as important, to provide an “experimental” first step toward a broader national health program.

This article examines the fate of these countywide cooperative health plans, from their origins in the Resettlement Administration in 1935 to the termination of the Farm Security Administration in 1946. Despite their relatively short life, the FSA health plans provide an instructive illustration of the history of American social policy: who initiates it, how it is implemented, and why it succeeds or fails. More than a decade ago a number of scholars—most notably Theda Skocpol—implored historians and other social scientists to “bring the state back in,” by treating “the state” (i.e., government and its rules, powers, and policies) as an actor in its own right, rather than as a dependent variable that simply responds to pressures from sources outside the state. Despite important differences between them, Skocpol pointed out, the traditional “society-centered” approaches of liberal pluralists, Marxists, and modernization theorists depicted a state responding to external forces of one sort or another: a plurality of interest groups, the needs of capitalism, or the inexorable “forces” of industrialization. A “state-centered” approach, on the other hand, took cognizance of “state autonomy,” or the ability of the state to “formulate and pursue goals that are not simply reflective of the demands or interests of social groups, classes, or society.” ³ In a similar vein, in 1984 the political scientists James Marsh and Johan Olsen called for a “new institutionalism,” an approach that treated state institutions as historical agents. “The state is not only affected by society,” Marsh and Olsen concluded, “but also affects it.” ⁴

Historians...