A Little History On Health Care Insurance

A Little History On Health Care Insurance

The big question now before Congress and the American people is whether or not our government should provide some kind of cheap health insurance to all. Also, should this be free or cheap? There are those that claim that cheap translates to poor quality.

Low cost health insurance meant something completely different back in the 1860s in the Civil War time period. In those days an affordable health insurance covered nothing more than an incident if you were traveling on a steamboat or by railroad. However, in 1847 the first actual group plan policies were issued from Massachusetts Health Insurance located in Boston. These plans actually covered an injury or illness. As time progressed, by about 1890 there were insurance providers that were now issuing “individual” policies for illness and disability.

In a more modern sense, the first “group health” plan for insurance came about by a small band of teachers located in Dallas, Texas. They signed an agreement with the Baylor Hospital for things like medical services, rooms and board and paid monthly installments. Popularity then increased for healthcare coverage in the 1930s to 1940s. Cheap health insurance began to really take off in 1932 when Blue Cross/Blue Shield, a nonprofit organization began offering group health plans. Negotiations evolved between the Blue Cross/Blue Shield organization and hospitals, along with their staff to have discounted contracts. Hospitals and their staff then enjoyed quick payment and an increase in volume, which meant revenues!

In the 1940s to the 1950s the first “employee-benefits” began to evolve. Unions stepped in to negotiate better and bigger benefit packages. At that time, World War II broke out and the government “froze wages” accelerating the idea of healthcare for groups. Employers were not able to attract employees by paying them more money so they attracted employees adding affordable health insurance free to their “benefits” package.

By 1954, the coverage within social security included disability benefits for the first time. In 1965, programs for Medicare and Medicaid were created by the United States government. At that time, private providers were paying 75% of the costs for healthcare. By 1995, the United States government was paying half of the costs.

President Clinton, in 1993 tried to get the US Congress to guarantee healthcare insurance for every American but Congress voted it out claiming it was way too expensive. So far, neither the Bush nor the Obama administrations have been able to get the United States Congress to come to an agreement.