History of Health Insurance

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Healthcare didn’t always exist in the United States. Before the 1920’s, most people didn’t have health coverage. Most people were treated at home and hardly anyone, except a few large employers offered healthcare. Everyone else paid out of pocket. As the population shifted from rural areas to urban centers, families lived in smaller homes with less room to care for sick family members (Faulkner 1960, p. 509). Increasing requirements for licensing and accreditation, in addition to a rising demand for medical care, eventually led to rising costs. By the end of 1920s, there was an increased demand for medical care and the costs of medical care increased.

During the time of the Great Depression and after, medical service plans grew. In the 40s, prepaid group healthcare began and during World War 2, wage and price controls were placed on American employers, so employers started to offer health benefits in order to compete for workers. Healthcare expenditures were 4.5 percent of GDP in the 50s and hospital care doubled.

Also in the 1950s, more medications become available. During the 70s, healthcare costs escalate rapidly. One reason is because of the unanticipated high Medicare costs. Another is because of rapid inflation in the economy as well as changes in medical care which include a greater use of technology, medications and other approaches to treatment. Health insurance has increased and been an important issue for all employers, the government and employees ever since.

Importance of Health Insurance

Having health insurance is valuable for a number of reasons. Having health insurance is important for multiple reasons. One reason is that people without insurance are given less medical care and less timely care. People w...

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...oup, National Health Care Expenditures Data, January 2012.

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