War and Health Insurance Policy in Japan and the United States: World War II to Postwar Reconstruction

4 Forming a Hybrid Health Insurance System: The United States, 1941–1945

President Franklin D. Roosevelt asked Congress to declare war on December 8, 1941, stating, “Yesterday, December 7, 1941—a date which will live in infamy— the United States of America was suddenly and deliberately attacked by naval and air forces of the Empire of Japan.”1 Japan’s attack on Pearl Harbor officially brought the United States into World War II. By that time, however, the American government had begun war preparations in response to the situation in Europe. When the United States recognized that Germany’s aggressiveness could not be resisted by Great Britain alone, it began a serious preparation for a long and full mobilization. As the plan for a large-scale mobilization commenced, federal officials in health care and the military pushed for the establishment of universal health insurance. However, by the end of 1943 the tide of the war changed, and the government foresaw that the war would soon be over. This change reduced the urgency to create universal health insurance. While the movement for universal health insurance rose and fell, however, more and more military-related personnel had access to public care, and more and more civilians were covered by private health insurance. As a result, by the end of the war, without universal health insurance, the United States had formed a hybrid health insurance system composed of public health insurance for select groups and private health insurance for those who could afford it or whose employers could afford it. Forming a Hybrid Health Insurance System The United States, 1941–1945 chapter four forming a hybrid health insurance system 73 moving toward radical reform, 1941–1943 When the federal government projected that the United States would soon enter the war and require a large-scale mobilization, it began to coordinate militaryandnonmilitaryagenciesthatdealtwithhealthcare .Thentheactualentry into the war radically deepened mobilization and led some government officials to plan policies to improve the health of draftees, war industry workers, and the rest of the population to make war mobilization more efficient. In contrasttothefederalgovernment ’sincreasingroleinhealthcare,theAMAlostits power to oppose the government’s authority in health care. From 1941 to 1943, expectations of the duration and intensity of the war encouraged the federal government to expand its authority in health insurance. The Empowered Government in Health Care Germany triggered World War II by invading Poland on September 1, 1939. In responsetoGermany’sinvasionofPoland,Rooseveltdeclaredalimitednational emergency on September 8. Adolf Hitler continued his aggression, overrunning the Low Countries—Belgium, the Netherlands, and Luxembourg—and invading France in May 1940. At that time Great Britain stood alone, and it suffered German air attacks beginning in the early summer of 1940. To coordinate the preparation for the war, Roosevelt created the Office of Emergency Management in the Executive Office of the President “to maintain coordination between the President and whatever defense agencies would be established.”2 He also created the National Defense Advisory Council for business leaders and government officials to discuss and supervise munitions production . In January 1941, furthermore, Roosevelt reorganized the National Defense Advisory Council as the Office of Production Management to give more authority and to centralize the government’s economic mobilization.3 Theradicalexpansionofthedefenseindustryfrom1940to1941forcedthegovernment ’s institutional coordination; occupying only 1.7% of the GNP in 1940, it expanded to 5.6% in 1941 and to 17.8% in 1942.4 In addition to coordinating industrial policy, the government gained the power to compel Americans to sacrifice their lives in battle. For the first time in theU.S.history,theconscriptionsystemwasestablishedwithoutanofficialdeclaration of war. In September 1940, Congress passed the Selective Training and Service Act. Immediately afterwards, the Selective Service System came into operation as a national organization for recruitment. It was also responsible for 74 health security as national security the physical examination of draftees. Lewis B. Hershey, then a lieutenant colonel , was appointed as its head and remained in the position during the war. On the same day, Roosevelt issued a proclamation for the registration of all male citizensbetween 21and36yearsofagewhowerelivingintheUnitedStates.5 In the spring of 1941, the federal government suggested a clear change in its foreign policy toward the war in Europe. In March, the Lend-Lease Act provided the president with the authority to sell, transfer, exchange, and lend equipment to any country defending itself against the Axis Powers. On May 27, 1941, Roosevelt declared an unlimited national emergency in response to British disasters in the Mediterranean in...