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The Commoner,
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The British Insurance Act
The nartdonafl insuirance .act is by Xur the most
tthoxougUgoiiUg measure of sociall meXwm linat lias
y.er r-eached the British statute ibook- One
might even ,go further. It 5b probacy he most
dar4ng atnd canip3icated .scheme -of national het
terment ev,er proposed and icamed in .a single
parliament. Jntaoduced on May 4 it x-eceSved
line royal assent on JPeceinber Itf, and -came Unto
operation on July 10 of the .present year- Its
jtacaage was in many, hut not in iM, wayjs, an
;xtraordinar.y personal triuxoph lor Itfr,. Xloyd
George. The bill was his -conception, and on
his shoulders fell almost the whole burden. of
defending and explaining it before parliaraent
And the .country. But he brought it forward .
without sufficient preliminary consultation w$.tb
the innumerable and yery powerful lntereuts it
was bound to affect Directly its details came to
be expounded formidable opposition developed
in .quarters where apparently he had Joofced
Tor a sympathetic support; for weeks -and even
months .on end the (Chancellor of the exchequer
was doing Jittie but receiving deputations, lis
tening to complaints, promising the removal of
grievances; he hardly eyer spoke in the house
without having jeome fresh amendment to pro
pose; and the intricate -and highly technical
character of the bill, and the fact that, in order
to get it passed by Christmas, debate had to be
forcibly restricted (with the -consequence that
come hundreds of amendments were adopted
without discussion), have resulted in the country
At large having only a very general idea of what
has actually ?een accomplished, I doubt whether
there are more than a dozen men in Great
Britain at this moment who could score 75 out
of a possible 100 marks in an examination paper
on the provinionx of the act. The average man,
befogged to begin -with by the revolting com
plexities of the -whole project, has found it
frankly iznpoftdble to keep up with its -manifold
transformations; and people generally have a
feeling that something hig and fine and dis
agreeable has happened without quite knowing
what The Daily Mail has published a daily
article which designed to nhovr that all the
benefits promised by the act are illusory. The
Daily Chronicle has replied to Jts contentions
point by point, hoping to prove that the benefits
are valid, actuarially sound, and will indubitably
bo forthcoming. And this hopeless divergence
of opinion is not to be ascribed solely or even
mainly to the dljjtortions of political partisan
ship, It pretty accurately reproduces the chaos
of mutual contradictions In which any two ordi
nary persons quickly find themselves involved
when they begin discussing the provisions of
the act Most people sympathize with what they
understand to bo the general aim and principle
of the measure; they will agree that there ought
to bo a scheme of national insurance against
Bickncss and unemployment, and that compul
sory contributions are the only possible basis on
which it can ho worked; but tho certainty that
they will very soon he called upon to pay out a
weekly sum of money fails to move them to
gladness, Tho act, I should say, is widely and
decidedly unpopular, and seems likely to tell
heavily against tho fortunes of the government.
Many of tho interests antagonized by its pro
visions aro still unreconciled tho doctors
especially vow that, unless their claims are
given further consideration, they will decline
to work tho act at all; passive resistance move
ments aro being organized against this feature
and against that; and it Is clear that tho insur
ance commissioners, for all tho latitude allowed
thorn, will have a hard task in resolving ambi
guities, conciliating opposition, and giving tho
moasuro a decont administrative start
Tho objects of tho act aro twofold (1) to
provide for insurance against loss of health and
for tho prevention and euro of sickness, and
(2) to provide for lnnuranco against unemploy
ment It Is founded on throo main principles
(a) tho principle of compulsion whorovor com
pulsion Is possible, (b) tho principle of admit
ting within ono year all persons between six
teen and sixty-fivo at a uniform rate of premium,
and, generally speaking, with oqual benefits, and
(c) tho principle of working tho act mainly
through existing friendly societies, trade unions
and other providont associations, of releasing
tho reserves at present hold by thoso societies
against currant risks, and thus of allowing thoso
who in tho past have voluntarily insured them
selves against sickness or unemployment to roap
an immediato advantage Tho act makes it
obligatory for aH persons of "between sixteen
and sixty-five to insure who are under contract
of sen-ice, whether paid by the hour, day, weeX
month or year, and whose earnings are less than
$&00 a year, This practically covers the -whole
rage of industrial employment artisans, me--tihanScBj
miners, clerks, shop assistants, domes
tic servants, sailors in .the mercantile marine,
tunspenionable employ.ees of local authorities or
railway coujpanaes, outworkers (with -certain
exceptions) , golf caddies, tc, etc. to the num
her, it is estimated, of soine 13,000,000 men
and women. Among those who are not re
quired to insure are 1) persons (other than
manual laborers) receiving more than $.800 a
year as salary, i2) pensionable servants of the
crown or of local authorities and clerks of rail
way -companies, 3) .pensionable public school
teachers, and ( 4), persons wozking on -their own -acwaai,a&,as
-baggage carriers, -washerwomen
and seamstresses. In -the case of 6MieTjs..and
of sailors in the royal navy there are special
arrangements. All who ,are -qualified to insure, -but
who for one reason or another do not, or
can not, insure in an "approved society" a
term which roughly covers the existing friendly
societies, trade unions, provident societies, jjck
clubs and dividing societies will . obliged-to .
do o through the post office. The-Jsason for.
this is that the state, in compelling these people
to insure, is compelling them to go to the
friendly and kindred societies if they want the
jgreatest returns for the premiums they are con
tributing, but it is not compelling the friendly,
societies to receive them. If they are manifestly
unhealthy the societies will naturally reject
them and the state will then either have to
exclude from all participation in the act a class
to whom its benefits would be particularly wel
come or arrange some other scheme for them
on its own initiative. It has chosen the latter
alternative; and all people who are reiected by
the friendly societies to the number, it is esti
mated, of $800,000 will be obliged to insure
through the post office and to put up with in
ferior benefits. Altogether the compulsory class
will thus include some 14,000,000 people.
But there are many thousands of men and
women whose income does not exceed $800 and
who yet are not "employed" persons within the
meaning of the act. They are people working
on their own account and not in the service of
another. There are also many thousands who
have been employed, who have insured them
selves In a friendly society or trade union for
five years or more, and who have then left their
employment and set up for themselves. There
aro supposed to be over 2,000,000 people in
these two categories, and the act allows them
to como within the scope of its benefits as
"voluntary contributors," provided they are will
ing to pay out of their own pockets the weekly
contribution which, In the case of employed
persons, Is paid by the employer. It is not ex
pected that all tho members of these two classes
will take advantage of the act, but somewhere
between a half and a third probably will. The
total anticipated beneficiaries of the act will
therefore number 15,000,000.
Tho insurance fund will be made up of con
tributions by (a) the worker, (b) tho employer,
and (c) tho state. Tho employer must pay the
contribution of each of his insured workers, as
well as his own contribution duo In respect of
them, and will repay himself by deducting the
amount of each worker's contribution from his
or her wages. Tho method of payment, as in
Germany, is to bo by stamps affixed to a card;
and tho weekly contributions are made up as
follows:
Weekly payment by employer For work
man: Wages not exceeding 36 cents a day, 12c
wages not exceeding 48 cents a day, 10c; wages
not exceeding 60 cents a day, 8c; wages exceed
ing 60 cents a day, 6c.
Weekly payment by employer For work
women: Wages not oxceding 36 cents a day
10c; wages not exceeding 48 cents a day, 8c'
wages not exceeding 60 cents a day, 6c; wages
exceeding 60 cents a day, 6c.
Weekly payment by workman or woman'
Wages not exceeding 36 cents a day, 0; wages
not exceeding 48 cents a day, 2c; wages not ex
ceeding 60 cents a day, 6c; wages exceeding 60
cents a day, 8c for mon, 6c for women.
Addition per week by state, tho equivalent of
Wages not excoding 36 cents a day, 6c; wages
not oxceding 48 cents a day, 6c; wages not ex-
ceeding 60 cents a day, 4c; wages exceeding 60
cents a day, 4c.
- - TOMsME 12, KOTber 46
Total payments per week: Wages no vlla
ing 3Ge a tiy, 1,8c lor men, 16c for wwa--wages
not exceeding 4$ -cents a day, He for
men, 16c lor women; wages not exceeding ct)
cents a day, 18c for men, 15c for women ; VagB
exceeding 60 cents a day, IBc for men, 1 k for
women.
The Denefits to he received by insur&a" per
sons from the funds thus provided are 1 ) free
medical treatment and attendance tarTj shout
life, including the provision of proper and'snffi-
dent medicines; 2) a siclmess heaeSt, payable
from the fourth day of the illness, aad oatin'ti
ing if necesary for twenty-six weeks at the
rate of $2.50 per week ior men and l fcO per
week for women, to he followed, if tk skk&t'ss
still continues, hy a disablement benefit of 51 25
a week; (3) free treatment in a sanatori-am for
the insured person and (if the insurance com
miltee so decide) ior his -wile 2nd children when
suffering from consumption the act maks a
special grant of 7,500,0i0 toward the erection
of "sanatoria and other institutions for the
-treatment of tuberculosis, and another anaual
-grant of -2-centsa -head for -each insured person,
and takes 30 -cents -a-head from the benefit funds
-for the purpose -of a Jtational campaign against
"the -white man's "plague;" and (4) a maternity
benefit of $6 payable from the father's iasnr
ance, or from the mothers if she is insured.
There' are, also -reduced rates with correspond
ingly Teduoed benefits for men and women, if
'unmarried and -with no dependents, between the
ages of sixteen and'twenty and for persons oTer
fifty years old on entry; and among the addi
tional benefits that will he available if the
Unauces permit are free medical attendance for
dependents, free dental treatment, convalescent
allowances, increase of the maternity benefits.and
increase of the existing old age pensions or old
age pensions at an earlier age than seventy.
The actuaries estimates the capitalized value
of the reserves which must be provided to carry
out the act at $335,000,000; they expect the
total contributions from employers and insured
persons to rise from some $65,000,000 in 1912
13 to nearly $120,000,000 in 1923-33, and the
state contributions to increase from $7,300,000
for the current year to some $31,000,000 twenty
years hence; and they reckon the annual expen
diture in benefits and in cost of administration
at $27,000,000 to begin with, rising to over
$125,000,000 in 1932-33. To exterminate the
debt of $335,000,000 the commissioners will re
tain out of the weekly contribution of a mem
ber of an approved society the sum of 3 1-9
cents in the case of a man and 3 cents in the case
of a woman. If their calculation: are right a
surplus of about 6 per cent over and above the
cost of the benefits will be provided by the
weekly contributions of employers and insured
persons, and the debt of $335,000,000 will be
extinguished by the end of eighteen and a
quarter years. This implies, of course, that
eighteen and a quarter years must elapse be
fore the benefits really procurable by the prem
iums can be enjoyed in full a point which to
some extent justifies the charge that the whole
insurance scheme is being carried through at
the expense of the young. It should also be
stated that no sick benefit is payable until six
months after entry into" insurance and no dis
ablement benefit until two years after entry;
that both benefits may bo reduced if, in a given
case, they exceed two-thirds of the usual wages
earned by the insured; and that medical, sana
torium and maternity benefits will be suspended
altogether if the insured is in arrears to an
amount greater than twenty-six contributions a
year on the average, and sickness benefit sus
pended if more than thirteen contributions a
year are in arrears. The fund is to be adminis
tered by a body of insurance commissioners who
aro armed with very large powers and who will
work in conjunction with an advisory committee
representing associations of employers, of ap
proved societies and of medical practitioners.
Under them insurance committees will bo set up
in every county and county borough, with a
minimum of forty and a maximum of eighty
members representing all the local interests in
volved, charged with the duty of administering
medical benefit, of controlling the sanatorium
fund, of administering the benefits of the post
office class, and of getting together all the avail
able information as to the health and sanitary
conditions of their districts. Below them, again,
will ho district committees working smaller
areas in greater detail and in co-operation wiui
tho local branches of the approved societies
through which the sickness, disablement, ma
ternity and "additional" benefits aro in the mam
to bo distributed. Mr. Lloyd George expects
from the activities of these county and istrl"
committees some invaluable results in the shape
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