Health insurance service is a form of insurance coverage that covers the cost of an insured individual’s medical and surgical expenses (Cunningham, 2012). According to Cunningham (2012), depending on the type of health insurance service insured against, an individual can pay the cost of medical expenses in using their own money and then the company will reimburse the individual or the medical expenses are paid directly by the insurance company. Health insurance services help citizens who are covered under different health insurance services to receive healthcare despite lacking enough money at the time of their health problem. Health insurance is, therefore, any program that helps in the payment of the medical expenses either privately, social welfare programs or by the government.
In the United States of America, the origin of the health insurance dates in the early 19th Century. Arguably, scholars have associated the origin of health insurance in the USA with the Great Depression, which occurred in the 1930s (Cunningham, 2012). Some medical scholars staunchly believe that the period of Great Depression acted as a set-off to the development of medical insurance in the USA. This is because it triggered hospitals and the then medical practitioners to start forming health insurance services. On the other hand, medical historical evidence dates the origin of health insurance in the USA in the late 1850s. As such, this retrospect essay aims at extensively discussing the history of health insurance services in the United States of America.
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"The History of Health Insurance in the United States of America".
The Origin of Health Insurance in the USA
Historically, the medical health insurance in the USA originated in 1850 with the establishment of the Accident Insurance which was being offered by Franklin Health Assurance Company. The company was located in Massachusetts (Cunningham, 2012). The health assurance company was only offering accident health insurance. Thereafter, the company consolidated very fast and by 1866 it was offering insurance services relating to injuries resulting from accidents which occurred on the road and in the steamboats. It grew rapidly and at the end of 1866 more than fifty other branches from the company had been established in other parts of the USA to offer accidental insurance.
Development of Health Insurance Services in the USA
The citizens of the USA saw the benefits of the services which were being offered by the Franklin Health Assurance Company and by 1911 another health insurance cover was established. This health assurance had a primary purpose of offering services to the disabled people in the society (Taubman, Allen, Wright, Baicker & Finkelstein, 2014). Apparently, the founder of the disability assurance aimed at implementing the disability policy because the disabled people in the then USA society were facing a hard time seeking for medical care. At this level, only medical conditions arising from accidents and the disabled people were entitled to the health insurance services since other services were not available. The other people had to pay for their own health expenses.
Subsequently, in the middle 20th Century, other traditional health insurance services which were being offered in the USA were reconstructed. Specifically, the Disability Insurance Policy was revolutionized and turned into a modern health insurance scheme (Taubman, Allen, Wright, Baicker & Finkelstein, 2014). It began offering health insurances resulting from other medical conditions such as the development of a personal sickness. At this period, the Hospital and Medical Policies were introduced and by 1920s, various hospitals began offering health insurance services to individuals (Taubman, Allen, Wright, Baicker & Finkelstein, 2014). The services were offered based on a pre-paid basis. Simply put, an individual had to first subscribe to the health insurance policy and start paying monthly contributions which were later used during their treatments.
In due course, the development of individual medical health insurance policies in the 1920s led to the emergence of Blue Cross Organizations in the early 1930s (Cunningham, 2012). This organization was made up teachers teaching in Dallas and Texas. They came together and developed an insurance policy which could cater for the medical expenses for themselves and their families. The services were however offered in only one hospital. They were not adopted in other Hospitals in the USA. Consequently, the benefits of the health insurance services which were being offered by the Blue Cross Organizations were notably in most of the USA citizens. They saw that the organization was salvaging teachers and their families in medical expenses. In effect, there was acute need to come up with another medical insurance organization to the cutter for other areas in the USA.
The current Health Maintenance Organizations (HMOs) in the USA originated as a result of the positive impact of Blue Cross Organizations (Taubman, Allen, Wright, Baicker & Finkelstein, 2014). These organizations date their origin in the early 1930s and they were made to offer health services to other hospitals in the United States of America. In addition, in the late 1930s, The Roosevelt Administration started establishing the appropriate ways which could be adopted in order to come up with a national health insurance policy in the USA. As such, the association formulated a Social Security system which was intended to offer health insurance services to all parts of the USA (Fishback & Kantor, 2013).
The Social Security system did not, however, function properly because the American Medical Association staged a strong opposition toward it. The opposition was due to the validity and efficiency of service which were being provided by the system. Nurses and medical practitioners said that the system was releasing funds to respective hospitals even after offering medical services to their patients covered under the system. The opposition made the Social Security System to be disbanded and the Great Depression period for hospitals came into existence. In the late 1930s, the Great Depression for hospitals led to the emergence of a number of health insurance services. For instance, the Conventional Insurance and Managed Care came into existence at this period. The two organizations were made to offer health insurance services to the whole of USA (Fishback & Kantor, 2013).
The period between 1940 and 1960 led to the emergence of other health insurance services. Specifically, at this period, the rise of employer-sponsored insurance was being advocated for (Fishback & Kantor, 2013). The services offering self-sponsorship in medical expenses dramatically rose and they gave citizens of the United States of America a variety of options to choose from. The rise was caused by the diverse effects of World War Two which led most people poor and helpless (Ford, Greenlund, & Hong, 2012). One of the fundamental health insurance organs, which was developed at this period was Public Health Insurance which was proposed by president Harry Truman (Ford, Greenlund, & Hong, 2012). This was caused by the fact that employees were not been given medical cover as one of the fringe benefits. The employees were only given sick leave and they were expected to pay their own medical bills.
From 1960 to 1965, Kerr-Mills Act proposed the development of a public health insurance facility which could cover for all USA citizens including the poor. The Act based on the fact that at this period only private health insurance services were available in the USA and the poor, unemployed and the elder people in the USA were not getting the services. As a result, the Kerr-Mills Act wanted a match on funding of the patients irrespective of their subscription. The congress rejected a proposal to subsidize medical provision for the poor and unemployed from the Social Security System. The rejection made President Lyndon Johnson to sign the Medicare and Medicaid into law in 1965 (Ford, Greenlund, & Hong, 2012). Signing this act into law led to the establishment of Public Health Assurance Services in the USA to cater for the poor and the unemployed citizens.
In the course of achieving proper health insurance services president Clinton came up with a proposal to establish universal health coverage for all citizens of the USA (Ford, Greenlund, & Hong, 2012). The proposal was signed into a law in 1994 and further developments were made on in 2009. Currently, the United States of American enjoys a great deal of universal health care insurance where all citizens are supposed to be covered and their medical expenses are paid with the public Insurance Services. Additionally, other private health insurance policies are also available in the USA and they are used by various citizens.
- Cunningham, J. (2012). The Blues: A History of the Blue Cross and Blue Shield System. DeKalb, IL: Northern Illinois University Press.
- Ford, E. S., Greenlund, K. J., & Hong, Y. (2012). Ideal cardiovascular health and mortality from all causes and diseases of the circulatory system among adults in the United States. Circulation, 125(8), 987-995.
- Taubman, S. L., Allen, H. L., Wright, B. J., Baicker, K., & Finkelstein, A. N. (2014). Medicaid increases emergency department use: evidence from Oregon’s Health Insurance Experiment. Science, 343(6168), 263-268.
- Workers’ Compensation. Chicago: University of Chicago Press for the National Bureau of Economic Research.
