Group health insurance created to appease ‘Commie symps’
Why did many American businesses voluntarily adopt group health insurance that was so radically opposed to their own interests?
The usual answer is that group health insurance offered an incentive to attract prospective employees while complying with World War II-era wage controls.
Seriously? If you wanted to hire a machinist in 1943, why insure the secretaries and janitors already on your payroll? Why insure their spouses and children? Why, after WWII wage controls were lifted and millions of returning servicemen were flooding American labor markets, did businesses expand group health insurance coverage instead of eliminating what ought to have been a wartime expedient?
The backdrop for group health insurance was the Depression, which exposed capitalism’s shortcomings; the New Deal, especially the Wagner Act, which legitimized labor unions; WWII mobilization, with its mess of propaganda, more economic regulation, and its uneasy alliance with the Soviet Union; and, finally, enormous uncertainty over the post-war future.
Some frightened businessmen saw the “managerial society” predicted by James Burnham in 1940. That was a values-debauched America, Bolshevism Lite steered by government bureaucrats and their corporate toadies careening from rule to regulation, dedicated to maintaining the distinction between “managers” and the chumps they managed.
Most businessmen feared the erosion of their mode of thinking and their way of life. They needed a gimmick to appease America’s Commie symps. They found it in the person of Clarence Rorem and his crazy group-health insurance idea.
His Rorem-Kimball group health insurance had a gigantic theoretical and practical appetite for money and would divert investment capital from a hundred once thriving Midwestern cities, transforming them into the Rust Belt.
Ontario, for example, where the Rorem-Kimball model is rightly banned, would displace Michigan to become North America’s largest motor vehicle producer.
There’s much else that awaits a congressional inquiry into health care, which — trust me — won’t be pretty.
Jack Labusch, Niles