Today it’s hard to imagine a world without a health insurance company. Health insurance companies are a necessity for modern life and everyone is looking for health care plans that fit their budget and needs. But it wasn’t always like this. Read on for the fascinating history of the health insurance business in America.
Just Before Modern Medicine
Before modern medicine and the advances of modern healthcare, hospitals were not great places to be. They were places where people went to die, particularly if they were poor or had no relatives to help them. With the introduction of antibiotics, the world changed quickly. Hospitals became safe places to have babies, and instead of most people leaving a hospital in a body bag, more and more were enjoying happy outcomes after a hospital visit.
What does this have to do with a health insurance company? As hospitals could do more and medicine could treat and cure far more conditions than in the past, things got more expensive. Educating doctors became more time-consuming. It took money and time to research medicines. A new understanding of germs meant new innovations in cleanliness: innovations that were time-consuming and expensive.
As things got more expensive, hospitals were concerned to fill their beds, not just with the desperately ill, but with people who were interested in preventative care. They noticed that the average person was happy to spend on food and cosmetics but spent nothing on health care unless they got very sick. Some cosmetic companies let people pay a little bit every month in order to get the newest shade of lipstick, and Baylor hospital in Texas took this example to heart.
The hospital offered people a plan where they would pay 50 cents a month to the hospital, and all treatments they might need would be free. Of course, at the time, most people would never set foot in a hospital unless they were deathly ill. When the Great Depression came along, this innovative idea became even more popular and was know as Blue Cross.
Blue Cross slowly grew across the country, but it was World War II that brought about the next big change. During the war, factories were desperate for workers. Yet with rationing, they were not free to offer the kinds of incentives and perks that had previously drawn employees. To make up for this, companies started offering health plans. When new rules in 1943 mandated that these employer health insurance plans must be tax free, it all became even more popular.
By the 1960s and 70s, most Americans were so used to employers providing health insurance that they seemed to believe it had always been that way. It was simply natural and an expected part of getting a job.
The average health insurance company in the 70s could never have imagined the innovations that would come in the next few decades. While these innovations are amazing, they are also enormously expensive. From flu shots to transplants, cancer treatments to elder care, brain surgery to nerve repair, medical care costs skyrocketed; and so did insurance premiums.
It remains to be seen what the future will be like for health care, for the health insurance company, for medical professionals, and for health insurance brokers. One thing is for sure; medicine will never be content to stop innovating, and health insurance will have to adapt to meet the future.