The health insurance scheme was the more complex and diverse of the two. It had a lot of vested interest in it and was seen to be ideologically progressive. Many did not think that the schemes should have been introduced and believed that the minister did not have enough legislative documents to back up the introduction of the policies. ‘Never has the phrase ‘politics is the art of the possible’ been more demonstrated’, (Fraser D (2003) The evolution of the British welfare state Palgrave Macmillan). Medics and friendly societies had a lot of interest in the implementation of the health insurance scheme.
Government did not want to be the direct deliverer of the scheme, which questions the great relationship that was argued to be established between the state and the people whenever they were not even the body that was deliver it and indeed did not want to deliver it. Friendly societies however did want to deliver it and persuaded Lloyd George and the minister etc to let them be the agents to do so. Many feel that the only reason that friendly societies were allowed to deliver this new scheme was because Lloyd George was ‘backed up against a wall’ and was fighting a battle behind the scenes against the friendly societies as they were not happy about any state competition in their field. Also industrial insurance companies, the largest being prudential, were not pleased about Lloyd George’s plans.
They felt that the benefits proposed by Lloyd George would compete with their own. In the end Lloyd George agreed to all the profit making societies such as prudential and the friendly societies to be a part of the scheme. It consisted of three parts, also known as a tripartite structure. These three parts were the government, each employed person and that person’s employer, therefore three sources of finance. ‘Each worker paid 4d a week and the employer added 3d and the state 2d’ (www.spartucus.schoolnet.co.uk, 1911 national insurance act, 23/04/2004). The benefits they got from these contributions was free medical attention, including medicine, it would also provide a sickness benefit of 10 shillings 60 pence a week. However there was no free access to a hospital. It many ways it was a good scheme for the persons involved, it was sometimes described as a scheme were you got 9 pence for 4 pence.
However there were a lot of faults with it. The sickness benefit only covered the insured person. Therefore married women living with their husbands in a family unit were not included. The wife’s health was therefore not important enough to insure. The husband’s health destitution was not dependant on the family however their health destitution was dependant on his. Also GP’s were formed into panels and they were paid a capitation fee depending on the number of ‘panel patients’ they had. This therefore led young doctors who needed the money to join the scheme and consequently doctors were in the scheme for all the wrong reasons which led to patients being over treated and becoming a statistics rather than a being cared for sufficiently.
Part two of the act was unemployment insurance. It needs to be considered alongside labour exchanges which were mainly dealt with by Winston Churchill and William Beverage. Beverage was, alongside Winston Churchill, a main thinker behind unemployment and ways to tackle it. Beverage believed ‘the fluidity of labour’ was something that needed to be aimed for. To promote mobility and fluidity two things were needed, employees had to know were to go and employers needed to let peoples know where the jobs are. Therefore the need for labour exchanges, now called job centres. Beverage also recognised that alongside labour exchange people needed support or a benefit when they were between jobs. The unemployment insurance scheme is much simpler than health insurance as no other country had it however no one wanted to run it.
In the end government themselves ran the scheme. Each employed person again paid a contribution along with the employer and the state. In return they got 7 shillings for each week they were unemployed and this was paid at the labour exchanges, which then helped them find another place of employment. It again has a lot of disadvantages for the people involved. To get one week’s benefit you had to of paid five week’s insurance, which is not a fair system especially for those who have not been able to pay five weeks or for those who have paid many weeks yet do not get that same amount of weeks benefit in return. Also it did not cover long term unemployment which was a huge problem. It only covered those who were, at maximum, 15 weeks unemployed, after that the individual was expected to be in employment. It also only initially covered a small scale.
Although the national insurance act was a significant change for society and no doubt a good one. There were many problems, most of which hindered the individual and benefited the state. The health insurance scheme was criticized by Beatrice and Sydney wed who argued that the money would be better spent on the health service as the health insurance scheme did not prevent ill health. They also argued that people would abuse the service provided for them because it was free. Although this is forgetting that people are paying higher income tax to finance it and are also contributing money into it themselves.
They argued that it encouraged malingering. I believe that the health insurance scheme initially was not a great one, there were many areas of difficulty at implementation and decisions were not thought through properly because of the extensive pressure from outside agencies. Also the state seemed to be compelling its citizens to provide insurance for themselves rather than providing straightforward state medicine and sickness benefits. The fact that unemployment insurance only covered a small scale to begin with and did not cover long-term unemployment is a weakness. Also that it only insured the husband for illness is a major disadvantage.
Neither schemes promoted a sense of ‘social integration’ which is what Lloyd George first predicted. However I do think to some extent that the health insurance and unemployed insurance schemes did produce a partnership between the state and the individual. Both parties were contributing to the to the schemes and for the first time the state seemed to have clear objectives and polices in place to tackle what affected individuals the most, unemployment and illness. I feel it was the first main policy in place to establish a better relationship between both the state and the individual.