Friday, September 18, 2020

When Was Health Insurance Established in the United States?

As is the case with many of the groundbreaking institutions and systems that have come to define the United States of America, establishing health insurance in the U.S. was an arduous journey characterized by a century’s worth of innovation. A single seed (Franklin Health Assurance Company of Massachusetts, an insurance firm founded in 1850) eventually bloomed into a bounty of crops for beneficiaries to enjoy (aka, 60 other organizations providing accident insurance by 1866).

Unfortunately, citizens around the world shrug off the current health insurance system, as "the American Way”: the tendency to place greater value on generating profits than treating patients in need of care. When looking just across the border to Canada, American citizens are wrought with a sense of envy and disbelief—disbelief in the fact that another reality exists where, if you fall gravely ill, there’s no need to worry about managing your finances or declaring bankruptcy to pay off your medical expenses.

Due to the skyrocketing costs of health insurance coverage, some Americans are dying from viruses thought to be eradicated decades prior. With unprecedented developments in healthcare, there’s no reason a healthy individual living in the 21st century should die of the flu. If you’re looking to shop short term health insurance plans, visit AHiX marketplace, an online health insurance marketplace where you can select plans best suited to your family’s needs.

While neighboring countries consistently point out the U.S. health care system’s life-threatening pitfalls, it’s important to understand how we came to adopt this current system. After all, studying history is an excellent way to avoid repeating history. To prevent future missteps, it’s absolutely pivotal to examine the early stages of our national healthcare system.

The beginning
Before 1908, there was very little discussion regarding a standardized system for treating the ill. Apart from wartime medical units and standard practices spread through printed texts and education, most doctors treated patients in their homes, and modern hospitals were only beginning to take form. Care providers were paid modestly for the services they offered. Much like society today, these patients are far more concerned about the loss of income they’d face if doctors forced them to stay at home to recover.

This reality changed dramatically in the 1930s in the midst of “The Great Depression”. Along with countless other national programs birthed from this overriding sense of desperation, the medical industry saw a real need to modernize and standardize to meet the nation’s health and safety needs.

Before private health insurance was institutionalized, the government began sponsoring coverage for workplace injuries. Following the Great War and the development of the Labor Rights Movement, this focus on health care intensified as the burgeoning industry of health insurance began to take its shape.

Blue Cross and Blue Shield
The great success of Blue Cross and Blue Shield, two distinct but related groups of health insurance providers, influenced the way insurance would be administered for decades to come. The targeting of groups of people less likely fall ill, and thus were less liable to benefit from their policies, proved extremely profitable. Their aggressive marketing to labor unions and individual workers increased the number of insured people in the United States drastically between the 1930s and 1960s.

The government partnered with Blue Cross and Blue Shield in 1965 to later establish Medicare. Founding Medicare posed a challenge, as the American Medical Association had been advocating strongly against any government intervention in the realm of health insurance since the 1910s. The association feared its “socialistic” qualities and argued that it would negatively affect physicians and private insurers’ profits.

Proponents of this theory were numerous as 700 private insurance companies existed in the US in the early 1960s [AMA Journal of Ethics]. Once it was acknowledged that total reformation proposals weren’t likely to garner success, advocates of a more nationalized, regulated system started to adopt a more subtle approach. In 1965, Congress established Medicare and Medicaid aimed at serving the elderly and the poor. However, these two programs adopted the same structural problems of reimbursement found in the private health insurance industry, which accelerated price inflation.

A defining step for the health insurance movement came in 1970 when the phrase "health maintenance organization" was coined to underline certain programs’ clinical prevention efforts. In the efforts to reduce resource utilization rates, hospital admissions rates, and lengths of stay, these founders created programs to make the industry even more profitable. This revelation was followed by The Health Maintenance Organization Act of 1973, which encouraged the growth of the HMO marketplace.

Between the late 1980s and early 1990s, health expenditure climbed dramatically, due to new medical technologies that were becoming more and more costly. In response, another failed attempt to reform the industry took place during President Clinton’s presidency. 

Final thoughts
Fast forwarding to the 21st century, there are no real signs that the healthcare industry is redefining itself in opposition to a profit-centered market. Most political attention is directed toward minor reforms. Today, around 15 percent of the United States population remains uninsured.

Searching for a viable option for health care can be a complicated process. Luckily there are many resources online to help, such as these two lists of useful medical links.

This is a guest blog entry.

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