Health Insurance - Medical Coverage For America: Past And Present

Health insurance in the United States originated around 1850 as voluntary programs through cooperative mutual benefit and fraternal beneficiary associations, as well as through some commercial companies, industries, and labor unions that offered limited coverage. President Theodore Roosevelt instigated the idea for government health insurance in the early 1900s, but his concept never materialized because of the public's fear of socialized medicine.

Over time, many plans were developed by societies of practicing physicians, but it was the community-sponsored, nonprofit service plans based on contracts with hospitals and subscribers that drew the greatest enrollment. Under the name "Blue Cross and Blue Shield," these plans extended coverage to dependents while excluding coverage of accidents and diseases covered by workers' compensation laws, but their limitations—such as excluding those who could not afford the coverage and senior citizens—led to their downfall and subsequent restructuring in the mid-1990s.

In 1965 the federal government created two national health insurance programs: Medicare for the elderly and Medicaid for the poor. The Health Maintenance Organization (HMO) Act was passed by Congress in 1973 to provide low-cost alternatives to hospitals and private doctors through employer-based plans.

While there are many health insurance options available in the country, the United States remains the only Western industrial nation without some form of comprehensive national health insurance. According to the U.S. Bureau of the Census, 15.5 percent of the population was without health insurance coverage in 1999, and 13.9 percent of the uninsured were children (under age eighteen). Even though the uninsured rate for children decreased between 1998 and 1999, poor children continued to represent the highest number without health insurance coverage, making up 28.2 percent of all uninsured children in 1999.