Interest Groups, Ideology, and Indirect Lobbying: The Rise of Private Health Insurance In the United States

This study examines the rise of private health insurance in the United States in the post- World War II era. We investigate the role of the American Medical Association (AMA) which financed a campaign against National Health Insurance that was directed by the country’s first political public relations firm, Whitaker & Baxter’s (WB) Campaigns, Inc. The AMA-WB Campaign had two key components: (1) physician outreach to patients and civic organizations; and (2) mass advertising that tied private insurance to “freedom” and “the American way.” We bring together archival data from several novel sources documenting Campaign intensity. We find a one standard deviation increase in Campaign exposure explains about 20% of the increase in private health insurance enrollment and a similar decline in public opinion support for legislation enacting National Health Insurance. We also find suggestive evidence that the Campaign altered the narrative for how legislators and pollsters described health insurance. These findings suggest the rise of private health insurance in the U.S. was not solely due to wartime wage freezes, collective bargaining, or favorable tax treatment. Rather, it was also enabled by an interest group-financed Campaign that used ideology to influence the behavior and views of ordinary citizens.