Chapter 5: Medicare
* In June 1883, Otto von Bismarck, then Chancellor of a newly united Germany, was successful in gaining passage of a compulsory health insurance bill covering all factory and mine workers. This, together with a series of reform measures including accident insurance, disability insurance, and an old-age bill, formed the core of Bismarck’s state socialist policy that was crafted both to outflank the entrepreneurial class and the liberal, laissez-faire party it supported and to detach labor from the social democratic left.1 The original Act was later amended to include workers engaged in transportation and commerce and, in 1911, was extended to almost all employees, including agricultural and domestic workers, teachers, actors, and musicians.2 The motives that impelled the German government to enact a compulsory, state-run medical insurance law were not inconsistent with the views of most social reformers of the period, who regarded a powerful, centralized, bureaucratic state as capable of being a kind and beneficent institution. Bismarck’s attempts to enact his social insurance bill did not, of course, go unopposed. A substantial portion of the imperial and Prussian bureaucracy held strong freemarket views and resisted the Chancellor’s attempts to introduce measures that so dramatically intruded into the marketplace. However, the opposition to Bismarck’s program proved unsuccessful and his victory encouraged reformist elements in other countries to agitate for similar legislation. As a consequence, compulsory national health insurance was hailed throughout Europe as a model of progressive legislation and, over the course of the next 30 years, was emulated by a...
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