Funny hats. Secret handshakes. What could these possibly have to do with today's discussion about the future of health care?

Maybe a lot, or not. But as politicians and policy wonks seek alternatives to employer-based health insurance, it might be useful to study a system that provided millions of families with coverage a century ago.

For most of us born after World War II, fraternal organizations are little more than curiosities - antiquated social clubs whose members are occasionally seen at small-town parades and community functions.

But fraternals were once much more than that. At the turn of the 20th century, scholars estimate, more than a third of all American men belonged to one or more societies, lodge fraternal groups.

As historian David Beito notes in his book, From Mutual Aid to the Welfare State: "More Americans belonged to fraternal societies than any other kind of voluntary association, with the possible exception of churches."

For almost a century, thousands of lodges, clubs and mutual-aid societies flourished all over the country. And their success had less to do with rituals and camaraderie than with their vital role in assuring the health and welfare of ordinary Americans.

Fraternal groups offered a variety of insurance arrangements, from simple pledges of mutual aid to full-scale life, health and disability benefits. Some lodges even built hospitals or hired their own doctors, providing members and their families with low-priced, flat-rate medical care.

Whether they were oriented toward religious or ethnic groups, or attracted people from similar economic backgrounds, lodges were ubiquitous. Immigrants in Northeastern cities had their own; so did African Americans in the deep South and rural tradesmen in the Midwest.

Social links were important because members had to be willing to share their risks and resources. They also had to submit to a certain amount of group policing; fraternals often sent "visiting committees" to see if members were genuinely sick or needy.

By the early 1900s, fraternals were such a large part of the American health-care system that they sparked a backlash from the medical profession. According to Beito, doctors who bid for contracts with lodges were denounced for lowering fees by competing on price. Leading medical organizations launched a crusade against the "lodge-practice evil" that lasted through the 1920s.

That was one of many reasons fraternal health insurance declined. Another was the rise of employer-sponsored health care among America's growing industrial firms. The Depression drove many fraternal chapters into bankruptcy in the 1930s. When the GIs came home from World War II, far fewer joined fraternals than had done so in previous generations.

Since the 1940s, moreover, federal tax policy has favored employer-provided health insurance, giving companies full tax deductions for any premiums they pay. Fraternals or other voluntary associations can buy group policies but get no tax breaks.

Change, however, is in the wind. This month, President Bush proposed capping the tax break for employer-paid health insurance and also extending it to individuals.

Many reformers also think it makes sense to sever the tie between insurance and employment, so that losing a job doesn't also mean losing health coverage, as it often does now.

But several problems would remain. Even with a tax break, individual health-insurance policies could cost much more than group plans.

That's partly because of high overhead, and partly because of a problem economists call adverse selection: Younger, healthier people are less likely to participate, leaving the rest to pay bigger bills.

Of course, a return to the early 1900s is clearly not the answer to our current insurance dilemma. Modern health care is far too complex and expensive for that.

But could the voluntary associations of that era still have something to teach us?

Maybe so. And not just the secret handshake.