X HISTORY IN THE UNITED STATES
Health insurance in the
The first modern group health insurance policy was issued in 1929, when a group of teachers in Dallas, Texas, contracted with Baylor Hospital for room, board, and medical services as needed in exchange for a monthly fee. Many life insurance companies entered the health insurance field in the 1930s and 1940s, and the popularity of health insurance grew quickly. In 1932 nonprofit organizations called Blue Cross or Blue Shield first began to offer policies of group health insurance. Blue Cross and Blue Shield were the first programs that established contracts directly with health care providers, who would then offer services to subscribers at reduced rates. Originally, Blue Cross plans covered the cost of hospital care, whereas Blue Shield plans covered doctors’ bills. Eventually, however, both Blue Cross and Blue Shield plans began covering all health care services.
Employee benefit plans became a widespread source of health insurance in the 1940s and 1950s. Increased union membership at
Government programs to cover health care costs began to expand during the 1950s and 1960s. Disability benefits were included in social security coverage for the first time in 1954. When the government first implemented Medicare and Medicaid programs in 1965, private sources paid 75 percent of health care costs in the
Throughout most of the 1980s and 1990s the majority of employer-sponsored group insurance plans switched from fee-for-service plans to managed care plans. As a result, most Americans with health insurance were enrolled in managed care plans by the mid-1990s. For example, in 1980 only 9.1 million Americans were enrolled in health maintenance organizations. By 1995 that figure had risen to 46.2 million. Employers made the change to managed care as part of an effort to improve the quality of health care for their employees while also monitoring the cost of providing insurance.
In 1993 President Bill Clinton presented to the U.S. Congress a health care reform plan that would guarantee health insurance for all Americans. Under the leadership of the president’s wife, Hillary Rodham Clinton, the Democratic Clinton administration’s special commission on health care reform claimed that in addition to providing universal health insurance, the proposal would stem the rapidly rising cost of health care. Republican leaders in Congress fiercely opposed the plan for being too expensive and for imposing excessive governmental regulations on health care. Opponents of the plan also attacked it for restricting patient choice of health care providers and for placing an undue burden on small businesses by forcing them to provide health insurance for their employees. In 1994 members of Congress introduced a variety of alternative proposals, but the administration never reached a compromise with Republicans, and
In 1996 Congress passed the Mental Health Parity Act, a law that requires employers with more than 50 workers to offer health plans that set yearly and lifetime limits for mental health care at the same level as limits for physical health care. Despite these important safeguards for workers, the law allows employers in some states to eliminate coverage of services to treat mental illness altogether. Also, the law allows employer-sponsored plans to charge higher deductibles and copayments to workers seeking mental health care.
