How Health Insurance Began?

With all of the current controversy over health care reform, it is interesting to go back and look at how health insurance began. Perhaps if the beginning is examined, where to go next will be clear.

The Original Concept

Hugh the Elder Chamberlain is credited with the first proposal for health care insurance in 1694. In his proposal, he suggested a calculation of risk, potential needs, and costs to come up with a regular payment, to ensure the money for medical treatment would be available when needed. However, health insurance did not really take off until the mid-nineteenth century.

Accident Insurance

During the Civil War, accident insurance began to be available in America. It provided coverage against travel accidents, specifically train or steamboat travel. Accident insurance, like modern disability insurance, provides a payout to the insured if they are injured in an accident. The first company to offer accident insurance was Franklin Health Insurance Company of Massachusetts, in 1850.

Modern Health Insurance Began

Before 1920, the medical industry was less regulated and less effective. However, medical practices became more advanced and the standard of care improved. Hospitals began to gain popularity in the Twenties, and health care costs began to rise. In 1929, a group of school teachers made a deal with Baylor Hospital to accept a regular monthly prepayment of fifty cents toward future hospital care. This association evolved into Blue Cross. Blue Shield was later created to cover the rising cost of doctor’s fees. And thus modern health insurance began.

Health insurance began as simple prepayment of services. Before that time, all health care was to be paid for at the time of the service. It will be very interesting to see what the future holds for health insurance.

Related posts:

1. How Important Is Health Insurance?
2. What is Health Insurance?
3. How Does Health Insurance Deductible Work?
4. How To Obtain Accident And Health Insurance License In Ohio?
5. What Are The Best Health Insurance Companies?

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