Policy Escalation: Richard Nixon, Welfare Reform, and the Development of a Comprehensive Approach to Health Insurance

Abstract I argue that health insurance emerged as an important aspect of Nixon’s domestic policy agenda as a result of “policy escalation.” By policy escalation, I mean a cascading line of reasoning that causes policy makers focused on one apparently discrete issue to formulate approaches for dealing with other interconnecting policy areas. Policy escalation serves as an internal agenda-setting mechanism: as policy makers contemplate policy changes, they may attempt to imagine the ways in which change will affect the rationale, fiscal position, and execution of programs in other policy areas. In the case of health insurance, the Nixon administration’s proposal for replacing Aid to Families with Dependent Children with a guaranteed minimum income forced policy makers to consider how the new program would interact with the existing Medicaid program. Consideration of this question ultimately led them to formulate an approach to overhauling the nation’s entire health insurance system.