HJNO Mar/Apr 2025

WHAT’S WRONG WITH HEALTHCARE 38 MAR / APR 2025 I  HEALTHCARE JOURNAL OF NEW ORLEANS   ing on the elderly and Medicaid serving low- income individuals, including children, preg- nant women, and individuals with disabilities. The passage of this law marked a significant shift in the U.S. healthcare system by establish- ing the federal government’s role in healthcare. In contrast to many other economically devel- oped nations, health insurance in the U.S. be- gan in the private marketplace as a means for hospitals and physicians to procure payment for services rendered, rather than arising from a societal construct that was intended to serve the collective good. Having cohorts of our population being unable to afford health insur- ance was viewed by some as a market failure of sorts, which brings us back to a debate about whether healthcare is a need or a luxury. At least some government leaders argued that it was the former, and eventually, the law that es- tablished Medicare and Medicaid was passed. However, not everyone was supportive of government involvement in health insurance, including the American Medical Association (AMA), which represented doctors. Then actor, and future president Ronald Reagan, also ini- tially opposed Medicare, famously said in 1961: “One of the traditional methods of impos- ing statism or socialism on a people has been by way of medicine. It’s very easy to disguise a medical program as a humanitarian proj- ect. Most people are a little reluctant to op- pose anything that suggests medical care for people who possibly can’t afford it … “… Under the Truman Administration it was proposed that we have a compulsory health insurance program for all people in the United States, and, of course, the American people unhesitatingly rejected this. So, with the Ameri- can people on record as not wanting socialized medicine, Congressman Forand introduced the Forand Bill. This was the idea that all people of social security age should be brought under a program of compulsory health insurance. Now, this would not only be our senior citizens. This would be the dependents and those who are disabled. This would be young people if they are dependents of someone eligible for Social Security. Now, Congressman Forand brought the program out on that idea of just for that particular group of people. But Congressman Forand was subscribing to this foot-in-the-door philosophy, because he said ‘If we can only break through and get our foot inside the door, then we can expand the program after that.’” 2 Reagan’s views on Medicare did evolve over time to a position of support once he became President, but his early views were representa- tive of concerns of government overreach into the functioning of private markets. Physicians in particular worried about their autonomy and their continued ability to set their own fees. One of the tradeoffs that ultimately resulted in the AMA supporting Medicare and Medicaid, was the continuation of fee-for-service reim- bursement with physicians being able to influ- ence the fee schedule, along with the prom- ise of generating increased revenue because of a greater number of insured individuals. 1960s to 2000s The introduction of the Medicare and Med- icaid programs in the 1960s did lead to more people being insured with the consequent abil- ity to better afford healthcare services. Howev- er, the problems of underinsurance or inability to afford insurance continued. Commercial in- surers, now including the Blues plans, not only used experience rating to set premiums, but also used underwriting as a way to assess the actuarial risk of individuals applying for health insurance. Through underwriting, insurers would evaluate factors such as an applicant’s age, gender, medical history, occupation, and lifestyle choices to determine the likelihood of future health expenses. It was through this pro- cess that potential customers were deemed low risk or high risk, or even too high risk to insure. To reduce financial risk, insurers would set high- er premiums for individuals deemed higher risk or, in some cases, exclude certain conditions from coverage entirely. This led to the practice of denying coverage or charging prohibitively high premiums to those with preexisting con- “Through underwriting, insurers would evaluate factors [...] to determine the likelihood of future health expenses. This approach prioritized profit by minimizing the insurer’s risk exposure but left many vulnerable populations without access to affordable healthcare.”