The Nixon plan: Forgotten national catastrophic health insurance plan could still be a model


Richard Nixon

Richard Nixon (Credit: Getty/Fox Photos)

This column originally appeared at The Niskanen Center. It is republished at Salon with permission.

People today remember the Nixon era mainly for the fiasco of Watergate, but there were positive moments, as well. Those included the first moon landing, passage of the Clean Air Act, and a dramatic diplomatic opening to China. There were also some bold policy initiatives that did not immediately bear fruit. This post takes a look at one of them, a proposal for universal catastrophic health insurance from Elliot Richardson’s Department of Health, Education and Welfare. It went nowhere then, but its time may now have come.

Elliot Richardson and the Mega Proposal

The child of a wealthy Boston family, Richardson was seemingly destined for public service. By the time he came to Washington, he had graduated from Harvard, landed at Utah Beach on D-Day, returned to Harvard for a law degree, and served as both Lieutenant Governor and Attorney General of Massachusetts.

Richardson was seen by those who worked under him as a rare combination of policy analyst and practical-minded politician. He had big ideas that went far beyond the clutter of overlapping programs he found when he arrived at HEW in June of 1970. Over the next two years, he put his staff to work on a sweeping plan for reform, known as the Mega Proposal, which covered all of the major areas for which HEW was responsible. The plan for healthcare reform was part of it.

The rationale of the Mega Proposal was explained in its preface:

Every budget season brings us up against past decisions which have mortgaged the future. Potential for control “next year” always appears bleak due to financial and political constraints. In the past, the Department has evaded this dilemma with rhetorical initiatives for the upcoming year or by riding with the political forces, in the end making only minor changes at the margin.

The result is a Federal system out of control. Federal resources are over-committed, results are over -promised, and access to government services is unequal and fragmented. The Federal program structure has become so complex that it is unmanageable. Interdependencies among programs are ignored because they cannot be understood, leaving rational choice difficult, if not impossible.

We propose to tackle the crisis of the Federal system head-on. The Comprehensive HEW Simplification and Reform which we present here is a redesign of the entire Department of Health, Education, and Welfare.

An article written in 1975 by Laurence E. Lynn, Jr., and John M. Seidl, both of whom participated in formulating the Mega Proposal, calls attention to some additional motivating principles: From the beginning, the proposal favored free-market solutions over direct governmental action. It sought to minimize people’s need to depend on public assistance by making them productive in their own right. Yet, at the same time, it vigorously advocated direct services and income support to those who needed help beyond what their own resources could provide.

Maximum Liability Health Insurance

As applied to healthcare, these principles …read more

Source:: Salon


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