III COMPULSORY HEALTH INSURANCE IN GREAT BRITAIN1 THE right of a government to coerce its citizens into insuring for those contingencies against which experience has proved that they are unable to protect themselves has been asserted not alone by Great Britain's Prussian enemy and eight other European nations but by democratic and individualistic England herself. The presentation of a bill for compulsory health insurance to the British Parliament in 1911 was the more remarkable since 5,500,000 of the more thrifty British workmen were then voluntarily insured against sickness through friendly societies and trade-unions. This voluntary insurance, however, did not provide for those who most needed it-the less thrifty, the more poorly paid, those to whom sickness was a greater disaster-who are now included within the compulsory system. To these 8,000,000 workers the only assured protection was that offered by the charitable societies and the poor law, with its hated stigma of "pauper." To the British this provision seemed wholly insufficient, and under the commanding leadership of Lloyd George a bill for compulsory health insurance embracing all workers was introduced into Parliament in May of 1911. It was passed the following December, came into operation in July of 1912, and six months later benefits became payable. Included within this "national health insurance," as it is termed in Great Britain, are all persons between sixteen and seventy employed for remuneration under any form of contract, if engaged in manual labor or if the rate of their annual earnings is less than $800.2 Within this classification numerically unimportant exemptions of individuals or the exclusion of occupations may be granted by the commissioners for reasons established by the act. Untouched by its compulsory provisions are all those working independently-the 1 From American Labor Legislation Review, Vol. VI (1916), pp. 127–137. 2 The income limit has been raised to $1250 by the amending act of 1919. small shopkeeper, the village carpenter or the cobbler, all of whom have no employer and whose insurance would be difficult to enforce. Those employed within the meaning of the act and insured during the first year, 1912, numbered 13,472,000, or nearly 30 per cent of the total population. The benefits to which these 13,472,000 workers are entitled include medical care, sanatorium treatment if attacked by tuberculosis, a cash benefit at the time of childbirth, a weekly payment during twenty-six weeks of illness in a year, and a smaller weekly sum during prolonged disability. The medical benefit guaranteed to each person insured for half a year consists of medical treatment, medicines, and specified appliances. This benefit is administered by insurance committees, which are appointed for definite areas to represent insured persons, doctors, and the local government of the administrative district. These committees arrange for the medical care of the insured workmen in accordance with regulations of the central administrative body, the 'insurance commission, and then draw up a list or "panel" of physicians who have agreed to the terms. These arrangements must observe two fundamental conditions: first, the right of every duly qualified physician who wishes to serve upon the panel to be placed upon it, provided he is not proved injurious to the service; and, second, the right of each insured person to select his physician from among those on the panel. For the remuneration of physicians a minimum of $1.68 and a maximum of $1.80 is annually set aside for the medical care of each insured person, regardless of the amount of medical attention he may require. This sum, exclusive of the cost of drugs and appliances, is nearly twice the average physician's income before the insurance act, estimated upon the basis of per capita of the population. Under these conditions about 20,000 doctors in England, Scotland, and Wales have undertaken insurance practice. This in various districts represents from 70 to 100 per cent of the medical profession practicing among the industrial population. Sanatorium benefit for the tuberculous insured is provided through the insurance committees, which make arrangements for sanatorium treatment with the local authorities. A weekly sick benefit for a maximum of twenty-six weeks in a year is granted to each insured person not over seventy years of age who has paid twenty-six contributions, and who produces a certificate from his panel doctor that he is incapable of work. Ten shillings ($2.40) a week for men and seven shillings sixpence ($1.80) a week for women is the legally established benefit paid by each society approved under the act. A disablement benefit of five shillings ($1.20) a week is paid to both men and women, insured for two years, when the illness extends beyond the twenty-six weeks covered by sickness benefit. This payment continues for the entire duration of the incapacity and ceases only when the insured reaches seventy, when an old-age pension of equal amount is due him under the old-age pensions act. The maternity benefit of $7.20 (exclusive of medical attendance) provided for the wife of each insured man as well as for each insured woman is one of the most popular and the most easily administered features. This payment, made solely to help defray the expenses of confinement without regard to incapacity either before or after, is to be distinguished from sickness benefit. Indeed, the receipt of a maternity benefit debars the insured mother from the right to receive sickness benefit for the four weeks immediately following confinement. The cost of these five benefits involving a large total annual expenditure is divided among the worker, the employer, and the state. Each insured man pays 8 cents weekly, an insured woman 6 cents, the employer 6 cents weekly for each employee, man or woman, while the state contributes an additional 4 cents. With the exception of the low-paid worker earning less than at the rate of 60 cents a day, for whom the employer and the state pay a larger proportion of the contribution, this rate is uniform for all age or wage groups and for all occupations, regardless of the sickness hazard of the industry. This flat-rate contribution, a distinguishing feature of the British system, is based upon the cost of providing a person of sixteen with all the benefits until seventy, and with medical and sanatorium benefits throughout life. It allows for the heavier claims of later life by charging the person of sixteen more than his benefits at that age actually cost. By this method a reserve is accumulated from which the claims of middle life may be met. To estimate this cost the sickness tables of the Manchester Unity-one of the old and wellmanaged friendly societies-were used after they had been adjusted to allow for a different distribution of age, occupation, and civil status among the compulsorily insured population. In this calculation it was assumed that each of the approved societies carrying insurance would have its fair proportion of the average distribution of risks, and that no one society would depart radically from the average in age distribution, in occupational hazards represented, or in proportion of married and unmarried members. The actuaries, however, were unable to find any suitable table for women, and according to their own admission they used the adjusted Manchester Unity table "without modification" to measure the probable rates of sickness among women. Upon these assumptions the attempt was made to determine once for all the liabilities of this gigantic new system of national insurance and to fix a uniform contribution which would be sufficient for future expenses among all societies. A uniform contribution for the various ages entering insurance at the inauguration of the system was possible only by crediting to those over sixteen the amount which, had they been insured from the age of sixteen, would have accumulated to their credit to pay for the heavier claims of old age. Accordingly a "reserve value" was credited to each person over sixteen included within the act, making an aggregate total of $432,000,000. This huge sum at first appeared only as a book credit. To convert this into cash, and at the same time to provide interest on the capital sum, nearly one fifth of each week's contribution is diverted to writing down the reserves, a process which it was originally estimated would require eighteen twenty years. When the reserves have been converted into cash, the released one fifth may be used for increasing the benefits established in the present act. The financial side of the act centers around the approved societies which are the real carriers of insurance, paying cash benefits to their members and reimbursing the insurance committees for expenditures connected with medical and sanatorium benefits. The approved societies, of which there are 23,500 independent societies, lodges, and courts, are in some cases the old friendly 1 The amount set aside from each weekly contribution has been reduced by the amending act of 1918. The sums thus released have been used to increase the money available for the payment of cash sickness benefit for women and to create various special funds established by the amending act. See footnotes 1 and 2, p. 50. en societies approved for the purposes of the act, some have been or ganized by trade-unions, and still others are special societies modeled after the friendly societies and organized to administer national health insurance. Following the prerogative of the friendly society, each insured person is given an unrestricted right to select his society, and each society may reject an applicant on any ground save that of age. Thus it may limit its membership to those who are members of a trade-union, to those who are engaged in a particular occupation, or to total abstainers, etc. The great discretionary power given to the societies to administer their own affairs is a keynote of the British system. In theory each society of over 5000 members is financially independent, its solvency depending upon its own successful administration. If the expenditure is in excess of the actuarial expectancy, a deficiency will result which the society must make good, either through a levy upon its members or by a reduction in its benefits. Temporary provisions for persons who might be refused and for those not desiring to join a society were supplied by the "deposit contributors' fund," under the control of the insurance commissioners. A segregation of the insured persons by trade has in some cases resulted from the freedom of the insured to choose his society and from restrictions placed upon membership by the societies themselves. In the words of the interim report of the departmental committee on approved society finance and administration, "Insured persons were allowed, were, indeed, urged, to segregate themselves into societies that seemed to promise satisfactory results, and the prospect was held out to them that they would derive a direct benefit from the wisdom of the choice of a society. In other words, Parliament contemplated in one fundamental aspect a departure from the fundamental working of a flat-rate system." This trade segregation, whether a favorable one, as in the case of bank clerks and domestic servants, or an unfavorable one, as in the case of cottonmill operatives, miners, and boot and shoe workers, carried with it the isolation of trade risk far below or far above the average occupational hazard for the entire insured population for which the flat-rate contribution was calculated. The uniform contribution calculated for the average is frequently insufficient for the worse risks, and a society may therefore be threatened with a deficiency, since |