During an era of health policy reform in Australia, community health advocates believed that community health centers (CHCs) could form a solid foundation for a new system of health care delivery. Instead, a proposal for national health insurance (Medibank) emerged as the predominant structural reform. Community health proposals were not abandoned, however, and a policy designed to give federal grant assistance for the establishment of CHCs was implemented in 1973. The historical account of how the 1973 Australian Community Health Program (CHP) was developed in the early 1970s is relevant to dilemmas faced by contemporary policy makers. Specifically, how did the CHP“survive” even though government leaders had moved away from traditional direct service models, choosing to focus more attention on indirect insurance reimbursement?