Podcast: John Price on President Nixon’s Health Care Strategy
President Nixon signs the National Cancer Act on December 23, 1971. (Richard Nixon Presidential Library)
John Price was Executive Director of the Urban Affairs Council in the Nixon White House
On this edition of the Nixon Now Podcast, we’re talking President Nixon’s health care strategy with John Price. In addition to presenting two comprehensive health care proposals to Congress, Nixon signed the National Cancer Act (1971) and the Health Maintenance Organization Act (1973).
Mr. Price served as Executive Director of the Urban Affairs Council and Special Assistant to the President in the Nixon White House. He is currently at work on a book about the Nixon White House domestic policy, and has lectured extensively on this subject at Oxford’s Rothermere Institute.
Jonathan Movroydis: Welcome to the “Nixon Now Podcast.” I’m Jonathan Movroydis. This is brought to you by the Nixon Foundation. We’re broadcasting from the Richard Nixon Presidential Library in Yorba Linda, California. You can follow us on Twitter @nixonfoundation or at nixonfoundation.org. On this edition of the Nixon Now Podcast, we’re talking President Nixon’s health care strategy with John Price. Mr. Price served as executive director of the Urban Affairs Council and Special Assistant to the President in the Nixon White House. He is currently at work on a book about the Nixon White House domestic policy, and has lectured extensively on this subject at Oxford’s Rothermere Institute. Mr. Price, as a reference point for our audience, when did major thinking about health care policy begin?
John Price: Really, the focus was in the New Deal in the Social Security Act, and health care was the shoe that didn’t drop. And it was only later in Harry Truman’s presidency that there was a major effort made to include that as part of the social safety net that Truman thought the New Deal had promised.
Jonathan Movroydis: You say that Eisenhower, who President Nixon served under as vice president, oversaw the creation of the most expansive health care and private insurance coverage of the latter 20th century. Why is this so?
John Price: It’s so because what he did was he went through the private health insurance system. But he did it through the tax code, through revisions in the 1954 IRS amendments. And what it did was it provided a reason for employers to give their employees insurance without the implications for them of taxes, and for the employees to receive these benefits without being taxed on them. And so it was called ESI, employer-sponsored insurance, and it was a huge change. And it went not just to the elderly, which is what the Social Security Act did or AFDC for dependent children, but it went to all employees.
Jonathan Movroydis: You write that Nixon jumped into the health care debates as a young congressman, second term in 1949. Could you explain this a little bit?
John Price: Yes. What happened was Harry Truman, to everyone’s amazement, had gotten reelected or elected in his own right, in 1948. And he came in with a head of steam intending to propose, basically, an employer health insurance program for everybody, federally provided, though, federally structured, federally financed. And so Nixon and some liberal Republicans, were going the direction of the insurance industry providing these things but providing them to everybody and with a subsidy. So Nixon teamed up with Jack Javits, who was from the House, as was Nixon, and most liberal member of the House, from the West Side of New York, and with two Republican liberal senators to offer a bill, which would have provided universal coverage and provided subsidies as well, for those who couldn’t afford the premiums.
Jonathan Movroydis: Did it pass?
John Price: No.
Jonathan Movroydis: Why not?
John Price: It was a little bit too much for the regular Republicans, Taft and who was the sort of leader in the Congress of the Republicans at that time, had a different approach, which was entirely to defer to the states. And Nixon wasn’t going that way. And so what we have in the Nixon-Javits proposal is a harbinger, a foretaste of what Nixon really came up with many years later, in his 1971 health proposal.
Jonathan Movroydis: Would you consider Nixon to be a liberal centrist or a conservative on health care policy?
John Price: On health care, he would not be called the most liberal because that would be the Ted Kennedys, that would be the Bernie Sanders, the sort of purely federal program, federally financed and federally administered, the single-payer, as we call it today. So Nixon was not over in that ballpark. Rather, he was very much in the liberal wing of the Republican Party. And he was progressive in the sense that he wanted the outcome to be a universal coverage, which is, if you think about it, a pretty liberal idea. He was just gonna do it by different means, using the private sector.
Jonathan Movroydis: In the 1960s, where would you put the status of American health care, particularly in the Kennedy and Johnson administrations?
John Price: Well, of course, it was under Lyndon Johnson that we got both Medicare for the elderly and Medicaid for the indigent. But interestingly, Dwight Eisenhower proposed a program called “Medicare for the aging.” And he didn’t get the substance of it. But Kennedy picked it up and proposed Medicare, which was Eisenhower’s term. So in the 1960s, you had a major move under Johnson. Really, Kennedy tried, but failed, as was true of Kennedy’s civil rights efforts. They were hapless, and it was left to Lyndon Johnson to get them passed. And he did. So if you’re talking about the 60s, you’re talking about this major effort in Medicare and Medicaid.
Jonathan Movroydis: Did health care figure much in President Nixon’s 1968 campaign messaging?
John Price: Not really. No, not nearly so much as reform of the welfare system or many other issues. But once he became president, the reality was Richard Nixon was the first president to serve at a time after passage of Medicare and Medicaid. And so what started to happen was that the costs of it became very apparent. And so he was very much tuned in on the budgetary side, the cost side, and that began to catch his attention.
Jonathan Movroydis: About what year did it get on the president’s radar?
John Price: Really, in reality, it was probably ’69 in one sense, because as he fashioned his welfare reform, it was clear that there were parts of that which related to things like food stamps, or housing assistance, but also to Medicaid, to medical programs. So they began to think about it. But it was only in 1970 that Nixon really said, “Let’s get on to this.” And he directed Ehrlichman to start cranking up a major effort to look at health.
Jonathan Movroydis: Could you take us through the genesis of that 1971 plan that Nixon gave to Congress?
John Price: Well, of course, as I say, you have this very interesting and influential and indicative background of Nixon’s in ’49. And then he again tried to help Eisenhower pass a bill to provide backstop for help for the elderly and their medical care in ’58, ’59. He had Javits’ help then. So he had that background in his head and in his sense of policy and purpose. But specifically, what happened was Nixon said, “I wanna get going.” And it was partly driven by Ted Kennedy and the Democrats. But it was partly driven by many factors, which were very personal and also, as I say, his awareness that costs were very, very strong and eating up a large part of the budget, after the passage and now the implementation of Medicare and Medicaid.
So what happened was they first turned to Spiro Agnew, the vice president, and Nixon asked Agnew to become the head of a policy study effort on health care. And if you believe John Ehrlichman, who was Nixon’s key domestic aide by that time, Ehrlichman says that Agnew was getting nowhere with it. And so they then pulled it back in and they started to look at a department initiative from the relevant department, which was Health, Education, and Welfare. And they came up, they the department, with an array of proposals, which, in total, cost anywhere from $1 billion to $30 billion in 1970. And they also had programs ranging from some 60 up to hundreds of different programs. And so Ehrlichman tore his hair out, what hair was left, and he said, “Look, we need to pull this back into the White House, and let’s start thinking this through hard.”
So I put my hand up at that point in the autumn of ’70. And I said, “I’d love to work on health care.” Ken Cole, Ehrlichman’s principal deputy, was his principal deputy and basically took the bulk of the effort. I, with Cole, created a new task force, and I worked on more of the cost containment side of things, while Ken worked on the health insurance and private sector side.
Jonathan Movroydis: What were the elements of the health care plan?
John Price: Well, they were, first of all, cost containment. And Nixon, remember, was a Californian, and he was very well aware of the Kaiser family and of the Kaiser Permanente program for cost containment in providing health care. Basically, it was prevention, preventative care. And the logic of it was that if you properly analyze and early analyze problems, you can treat them without their becoming hospitalization type events. So he was appealed to by that. And Edgar Kaiser came in to see him early in 1970 and I think was very influential in the chat that he and Nixon had. So that was the piece I took. And that was what became the health maintenance organizations piece of this whole puzzle, which did just what I was talking about.
The other part of it was the scope of the coverage and the benefits. And these were very broad. And what Nixon said to some of us was, you know, through Eisenhower and the ESI that I mentioned earlier, employer-sponsored insurance, we now have 65% of all employees, working employees, covered. I’m gonna cover the rest. And so the other main feature of his proposal was to say to employers, “You have a mandate. You will provide health insurance to every one of your employees, whether they are one or more employees that you have. And if they can’t afford to help pay part of the premium, we will provide a government subsidy to do that.”
This became called the Family Health Insurance Plan. And it was also on Nixon’s mind that there were unemployed people. And so he decided to create pools, which would have shared risk for those folks who weren’t working with an employer or who otherwise were not able to get insurance. So those were the key elements, cost control and virtually universal coverage. And the benefits were extraordinary. For example, Richard Nixon in 1971 said, “We shall cover preexisting conditions.” Have you heard that phrase?
Jonathan Movroydis: Yes, I have.
John Price: Yeah. It was almost 50 years ago that he said, “Let’s do it.” He also said, “Prescription drug costs are terribly high. We are going to cover prescription drug costs,” not just what George Bush did 40 years later for the elderly, but for everybody. This is Richard Nixon in 1971.
Jonathan Movroydis: In terms of the costs and the budget for the plan, do you think it was feasible?
John Price: Well, the portion about the cost containment, it became called the Health Maintenance Organizations, HMOs. In theory, they would be very effective in bringing down costs. Nixon was cost-conscious, and he was still constrained by the war. So he did this somewhat reluctantly, because of budgetary issues, but I just think he was overwhelmed or overcome by his sense of the need for coverage. And the need to make sure that people living at the margins were not feeling despair.
Jonathan Movroydis: Senator Ted Kennedy later said that he regretted not supporting this health care proposal. Why did he oppose it?
John Price: He was for the single-payer, flat-out, and he was very much a creature of trade unions and its politics at the time. Their position was very strongly in favor of a single-payer or federal program. So Kennedy, broke with them only at his peril. And what did happen, and he did have some peril, was that he did buy into the idea of some cost participation by patients, and AFL-CIO broke with him on that. They no longer would, basically, talk with him. And he and the chair of the Ways and Means committee and President Nixon with Cap Weinberger, by now the secretary of HEW, worked toward a deal, but it was getting late. This was very early in 1974. And other clouds were forming, Watergate.
Jonathan Movroydis: In the 1971 proposal, so does this make it to Congress, this proposal? Are there debates between Congress and among congressmen amongst…
John Price: Oh, yes. Oh, yes.
Jonathan Movroydis: …as it reached the Senate?
John Price: No, it was set up. In a way, as the welfare reform found, the Senate was the graveyard, the bone burial. And the key player in both cases was Senator Russell Long of Louisiana, who was chair of the Senate Finance Committee. He basically killed the family assistance plan along with Senator Williams, a Republican from Delaware, but Long had his own pet horse to ride and it was catastrophic coverage only. And so he was not well disposed toward moving the bill. And it never got along.
Jonathan Movroydis: It never made it to the to the Senate floor?
John Price: No, I don’t believe it did.
Jonathan Movroydis: Nixon reintroduces the legislation, you had mentioned that…
John Price: Seventy-three, seventy-four. That’s right.
Jonathan Movroydis: And you mentioned that the cloud of Watergate killed it. But what was the difference between the ’74 and the ’71 plans?
John Price: The ’70, ’73, or ’74 plan did include a program for virtually for everybody, and it was called the Affordable Health Insurance Program. And it was unifying Medicaid. It was providing more uniform benefits and standards for even the Medicaid beneficiaries and those who just fell outside Medicaid. So it was more universal in its coverage.
Jonathan Movroydis: Do you see any of these elements of the Nixon plans in future legislation?
John Price: Yes, you see Obama. Well, you see Clinton, in one sense, buying into the notion of using the health insurers. What the health insurers didn’t like and why they fought like the devil to kill Clinton’s plan was that it was clearly going to require federal regulation of the insurers. The insurance companies were, up until that time, regulated by state insurance regulators. And so they did not want to fall into the federal purview. Frankly, had Nixon’s plan passed, there would have been some federal review at HEW of the insurance policies themselves. But so Clinton tried it. With Obama, you do have the employer mandate, which Nixon proposed. And you also had with Obama the efforts at the cost containment. It sort of tap danced further on the idea of the health maintenance organizations and the preventive care as a means of cost containment.
So those were clearly within the Obamacare proposal. Interestingly, Nixon thought about what became the sort of third rail of Obamacare, he thought about an individual mandate, and did not take that route. He thought about it, because intellectually, what he realized was that in order to have a private sector system, which worked, you had to pool the risk, all the risk, so that you could bring premiums down, because you were covering the healthy as well as the people needing medical care. And so he pondered that. They debated it very seriously in ’71. But they decided not to cross that bridge, Obama crossed that bridge. Nixon would have understood the pure partisan politics of how the Republicans then went after Obama for that unpopular element. But Nixon had understood it was a logical part of a private sector solution to the issue.
Jonathan Movroydis: Do you think if Watergate had not happened, the 1974 bill would have passed with bipartisan support?
John Price: It might well, yes.
Jonathan Movroydis: Even among Republicans as well?
John Price: I think that there would have been enough of…Don’t forget the Democrats controlled both houses. And so that was crucial element and, actually, Kennedy bought into a Nixon-Mills bill, and so it was moving down the track. But then, it was not just Watergate, but the chairman of the Ways and Means committee committed his own peccadillo by waiting in the Tidal Basin with an Argentine striptease artist. And that somewhat curtailed his authority in the federal city.
Jonathan Movroydis: In your article, in your speech at Oxford, you talk about Nixon’s Quaker background playing a role in his thinking about health care. Could you explain that a little bit?
John Price: Well, he came from a family which lived usually at the margins economically, and most specifically, two of his brothers were lost to tuberculosis. And his mother had to go to Arizona in the case of each of them for a year or more at a time, looking after other young patients as well, in order to afford it because there was no medical insurance. So Nixon was powerfully, palpably aware of the risks to a family’s economic security of illness. And he just had a sense of community responsibility. There is some piece of him consistently, whether it’s in food stamps, or in the welfare proposal, or here in the health coverage, that reflects a visceral connection with people living at the margins.
Jonathan Movroydis: In 1971, Nixon launches his conquest of cancer initiative somewhat separately from the comprehensive health care reform. Could you talk about how this took shape?
John Price: Yes, his sleeve was being pulled up by a number of people very concerned about cancer, and he was very receptive. But the interesting and maybe Quaker or friends angle on this is that he had just earlier that year, that season, announced the abolition of American involvement in chemical and biological weaponry. And we were either gonna produce it, or keep it, and/or sell it. And the place which had been the focus for the military services in those products was Fort Detrick, Maryland. And what Nixon did as a wonderful twist, and sort of a sweetly ironic twist was he converted Fort Detrick into the headquarters of the National Cancer Drive, the anti-cancer drive.
Jonathan Movroydis: And then the bill passes at the end of the year.
John Price: I believe.
Jonathan Movroydis: The National Cancer Act of 1971. What is in that legislation?
John Price: Well, a tremendous ramp up of funding for cancer research. And it is to be embodied in this new center, which was physically headquartered where I told you, at Ford Detrick.
Jonathan Movroydis: Do you feel that the National Cancer Act and the funds that have gone to cancer have significantly curbed cancer and has contributed greatly to cancer research?
John Price: Well, cancer hasn’t gone away. But they did certainly amplify the amount of money that was going into hard research on it. My own son is COO of a cancer startup, anti-cancer drug startup. I’m very tuned in on it
Jonathan Movroydis: You had mentioned health maintenance organizations, HMOs. Nixon, although the comprehensive health care reform bills didn’t pass in ’71 and ’74, he did pass an HMO Act.
John Price: Yes. And it was signed in December of ’73. And it was the only piece of the proposed ’71 legislation which did find its way to his desk.
Jonathan Movroydis: How did that happen versus…?
John Price: It was less controversial. It was less controversial, and it was to help start a private sector as well as not-for-profit health maintenance organizations. And it was basically funding efforts at also ensuring that states could not impede the creation of that. So it was trying to roll out almost a prototype of a form of health practice that seemed, logically, to be both budgetarily conscious, and also to be trying to put people in good health.
Jonathan Movroydis: In 2009, President Obama passed the Affordable Care Act. President Trump has been working to strip down the Affordable Care Act. Why do you feel that, 50 years on, Nixon’s health care proposals is an important study for policymakers?
John Price: We are back to the point where the Republican Party was in 1949, with Bob Taft. They were favoring an approach, basically, through the states, and with very little concern about how large the participation was, or any concern about uniformity of benefits or of eligibility standards. That’s what Richard Nixon and Jack Javits, and two senators, one was Ralph Flanders of Vermont, Republican, and Irving Ives of New York, tried to do in 1949. They said, “We need to have much more macro views here. We need to be concerned with uniform eligibility standards. We need to be concerned with subsidizing those people who need help in paying premiums.” So we backtracked, and Nixon was on the opposite side to what the Republican Party is now and has now been trying to do for almost a decade.
Jonathan Movroydis: Our guest today is John Price, former executive director of the Urban Affairs Council and Special Assistant to President Nixon. Our topic is President Nixon’s health care strategy. Mr. Price, thank you so much for joining us.
John Price: Jonathan, you’re more than welcome. Hope it was clarifying.
Jonathan Movroydis: Please check back for future podcasts at nixonfoundation.org or on your favorite podcast app. This is Jonathan Movroydis in Yorba Linda.