How did health insurance begin in the United States?
This article will help you with that.
http://en.wikipedia.org/wiki/Health_insurance
Thank you.
The history of health insurance in the United States dates back to the early 20th century. To understand how it began, several key milestones can be identified:
1. Rise of Industrialization: As industrialization gained momentum in the late 19th century, the work environment became increasingly hazardous. This led to widespread injuries and illnesses among workers who lacked financial protection.
2. The Early Employer-Based Model: In the early 20th century, some employers began offering their workers pre-paid medical services. These early models of health insurance were more like prepaid medical plans rather than comprehensive insurance policies. The concept originated from a desire to attract and retain workers in a competitive labor market.
3. The Birth of Blue Cross and Blue Shield: The first true health insurance plan emerged in 1929 when a group of Dallas schoolteachers formed the American Hospital Association, which eventually became Blue Cross. They offered prepaid hospital care, and the model spread across the country over the following years. In 1939, Blue Shield was created to provide physician services.
4. World War II and Wage Controls: During World War II, the U.S. government imposed wage and price controls. As a result, employers looked for non-wage benefits to attract workers. Health benefits became a popular option, and businesses started offering health insurance as a way to compete for labor.
5. Tax Exemption for Employer-Based Health Insurance: In 1943, the Internal Revenue Service (IRS) ruled that health insurance premiums paid for by employers were exempt from income tax. This created a strong incentive for employers to provide health insurance as a benefit, effectively solidifying the employer-based health insurance system that dominates the U.S. today.
It's important to note that health insurance in the U.S. has evolved significantly over the years, and its current complexity and challenges are products of historical developments, policy decisions, and changing societal needs. Further research can provide additional insights into these aspects.