In 1798, President John Adams signed a law that required the owners of American ships to withhold 20 cents a month for each crewman’s pay and to forward the money to customs offices in various ports. Customs officers were required to forward the money to the secretary of the Treasury, who would use the money to pay the hospital bills of ailing sailors. The funding also supported a network of marine hospitals.
These programs were the ancestors of today’s giant federal health programs, Medicare and Medicaid, and provide an early illustration of the problem with government-funded health care. On the weekend, I came across a description of these early health care programs from an older book on the history of the Department of Health and Human Services:
In its first years, the [Marine Hospital Service] MHS was plagued by administrative problems…Further problems arose because funds generated by withholding taxes from sailors’ pay frequently fell short of the cost of providing medical services. Eventually, the MHS was forced to impose a four-month limit on the amount of time a patient could stay in a marine hospital and to deny care to those with chronic or incurable ailments. MHS officials constantly had to appeal to Congress to allocate supplemental funds.
We’ve seen these problems of cost overruns, administrative mismanagement, and rationing whenever government has pushed its tentacles further into the health care system. Let’s not make these problems worse with another unaffordable expansion.