Enough with the health care policy patchwork. It’s time for universal insurance

Everyone knows that the United States is the only high-income country without universal health insurance. According to the standard narrative, this is the inevitable result of U.S. exceptionalism — our different values, culture, and institutions.

Not so. The impetus for universal coverage is as strong in the United States as in any other country.

In fact, the United States enacted the world’s very first national, compulsory health insurance law.

In 1798.

No, that’s not a typo. Nor is it merely an esoteric piece of historical trivia.

The driving force behind that early, federal health insurance mandate speaks volumes to the problem that the United States has been trying — and failing — to solve for centuries: how to provide access to essential health care, regardless of resources.

The existence of this unwritten social contract may be hard to believe in a country that has yet to enact universal health insurance and a society that advocates for lifting oneself up by the bootstraps. Yet the record is clear: Our country has always tried to provide essential medical care to those who are ill and unable to provide for their own care.

It’s time to finally fulfill this commitment. Once we recognize that we always have and always will attempt to provide access to medical care to those who are ill and cannot provide it for themselves, the only solution is to formalize that commitment up front with insurance coverage.

Alexander Hamilton articulated this argument over two centuries ago. He urged the brand-new Congress to create what became a compulsory, tax-financed, health insurance program for commercial seamen. It bore an eerie resemblance to the 21st-century Obamacare: an insurance mandate, coupled with a fine for noncompliance. The 18th-century version required that whenever a U.S. ship arrived back from a foreign port, each ship owner had to deduct a tax of 20 cents per sailor per month at sea from the sailors’ wages, and pay it to the customs agent who then transmitted this money to the federal government. Ship owners who were caught avoiding the tax faced a $100 fine.

The rationale for the mandate: Seamen hailed from throughout the nation, but when they fell ill, they became a concentrated burden on the local port communities and the charitable hospitals that provided care for patients without family members around to do so. The solution: Make the sailors contribute upfront to a fund that would be collected by the government and used, according to the 1798 act, “to provide for the temporary relief and maintenance of sick or disabled seamen, in the hospitals or other proper institutions.” As then-Treasury Secretary Alexander Hamilton explained in a 1792 letter to Congress urging the adoption of the policy, the need for it stemmed from “humanity’s … tendency to protect from want and misery … a very needy class of the Community.”

In the 20th and 21st centuries, this very same “tendency” — the human impulse to intervene when individuals are ill and lack the resources to care for themselves — has been the driving force behind our long history of health care policy patches that have tried but so far failed to fully fulfill our moral commitments.

It was behind the enactment of Medicare and Medicaid in the 1960s to provide health insurance to the elderly and the indigent.

And it has been behind the many, subsequent, piecemeal policies that have since expanded coverage for people with particular diseases — including breast cancer, tuberculosis, end-stage kidney failure, HIV/AIDS, Lou Gehrig’s disease, sickle cell anemia, and (most recently) Covid. Or for people in particular circumstances, such as pregnant women, prisoners, or disabled individuals. In enacting the 1972 policy patch that expanded Medicare to provide coverage to long-term disabled people, President Nixon declared that the policy “reaffirms and reinforces America’s traditional efforts to assist those of our citizens who, through no fault of their own, are unable to help themselves.”

Even a casual knowledge of the current state of U.S. health policy makes clear that these “traditional efforts” have not been fully successful. About 1 in 10 Americans under 65 remains uninsured. Those who are fortunate enough to have insurance live with the constant danger of losing it if they become unemployed, give birth, get older, get healthier, get richer, or move. Even if they manage to maintain their insurance, they still face the risk of enormous medical bills for their “covered” care. But these problems represent the failure to fulfill the obligations we have acknowledged, not their absence.

There is only one way to fulfill our innate and inevitable societal instinct to come to the aid of individuals who are ill and lack the resources to care for themselves.

Automatic, basic, universal coverage.

This instinct, and this solution, have been acknowledged across the world. In the mid-20th century, the famously free-market Austrian economist F.A. Hayek railed against the newly formed British National Health Service while simultaneously embracing the Hamiltonian rationale for compulsory health insurance. The Swiss likewise invoked what they described as “the recognized duty of the public to provide for the extreme needs of … sickness” when they created mandatory universal coverage in 1996.

In the past few decades, this rationale for universal coverage has also been embraced by American leaders from across the political spectrum. Massachusetts Republican Gov. Mitt Romney mandated universal coverage in Massachusetts several years before the 2010 Affordable Care Act. He argued that individuals who fall ill but lack insurance will ultimately receive medical care but not pay for most of it, so we should mandate that they — like the 18th-century mariners — purchase insurance to fund that care upfront. Supreme Court Justice Ruth Bader Ginsburg likewise invoked the “embedded social norms … to provide care when it is most needed, regardless of the patient’s ability to pay” in her 2012 opinion supporting the constitutionality of the Obama administration’s health insurance mandate.

The instinct was right, but the implementation was off. As we now all know, although the U.S. mandated universal coverage in 2010, it has not achieved it. Thirty million Americans remain uninsured. Calling it universal doesn’t make it so.

The only solution is to provide coverage automatically, financed out of taxes on earned income. Just as it was for seamen in the 18th century. It can be quite basic — our social norm is about providing essential care, not luxury service. But until we do so, our drive to fulfill our social obligations will doom us to repeat the endless cycle of imperfect half-measures and inadequate health care policy patches that has been our health care history for more than a half-century.

This is neither a liberal nor a conservative argument. It is merely good sense.

Liran Einav is a professor of economics at Stanford. Amy Finkelstein in a professor of economics at MIT. This essay is adapted from their new book “We’ve Got You Covered: Rebooting American Health Care.”