Why Did Americans Reject Compulsory Health Insurance after WWI? An Application of the Lifecycle Model

Abstract EN

Progressive reformers failed to gain support to implement compulsory health insurance in the US after WWI.

Modeling results presented in this paper, using a lifecycle model with sickness risk and precautionary savings, support the conclusion that existing voluntary insurance plans were adequate and welfare-enhancing in the US, that compulsory health insurance as proposed would not be welfare-enhancing, and that Americans' preference to self-insure during most of their working lives was rational, utility-maximizing behaviour.