Health insurance was one of the most influential social reforms on the immediate postwar agenda in Canada and the United States. In both cases, proposals for national health insurance were not implemented. This article traces the evolution of these legislative proposals of the 1940s and shows how the events of this pivotal decade set the stage for future health reform in the two countries. The analysis focuses on how political institutions condition the role of state actors and the articulation of societal groups, and particularly on the crucial differences in party systems and the role of parties in shaping health reform in the two countries. In the United States, a divided Democratic party and the imperatives of political compromise made forging a consensus around health insurance more difficult. In Canada, meanwhile, the presence of a social-democratic third party led to a very different type of debate about health reform and opened the door for national health insurance.