A Brief History of Health Insurance

Health insurance is a concern to every American. The costs of health care without the assistance of health insurance provider can be astronomical. Especially now, with the fragility of the current economic climate, health insurance is a major concern.

The origins of health insurance began in the United States as early as the mid-1800s as "accident" insurance, which operated much like the disability insurance of today. Often this coverage was related to accidents caused by rail or steamboat. These early coverage plans laid the foundation for more modern comprehensive medical and health coverage. The first group policy providing comprehensive coverage was offered in 1847 by Massachusetts Health Insurance of Boston. In 1929 a group of teachers in Dallas, Texas contracted with a local hospital for room, board, and medical services for a fee.

In 1940s and 1950s major steps were taken in the direction of modern health benefits when unions bargained with employers for benefit packages and tax free employee sponsored health insurance. During war time, wage freezes helped the proliferation of health insurance as employers used better benefit packages to attract employees since they could not pay more.

In 1965 the United States government created the Medicare and Medicaid programs. By that time, private sources still paid 75% of all health care costs. But by 1995, the government was responsible for about half of the nations health care costs. Today, because the extraordinary cost of health care, many politicians are pushing for a more European style of free health care. However, there is much debate on the subject. Americans still rely on health insurance providers for low cost health care.