The History of Health Insurance

By Amanda Ahlquist, Premier Health Insurance of Montana

Health insurance was started in the United States in the mid-1800s, it started out as just accident plans to help cover those who were injured in a steamboat or railroad accident. By the 1890s it began to cover illnesses as well. As time went on, the cost of healthcare began to rise, causing more health insurance companies to be established, such as Blue Cross Blue Shield in the 1930s. In the 1960s, Medicare and Medicaid were then formed to help the elderly and the lower income citizens afford their care. By the 1980s, Medicare established lower payouts as the costs for medical care continued to rise and the government saw that they could not keep up with the reasonable and customary payout trend.

At that time, within the private insurance companies, HMOs (Health Maintenance Organizations) were also being started to combat the rise in healthcare costs. Thesewere plans with more limited networks encouraging the customer to seek care with their primary care provider first and helping to bring down some of the healthcare costs for the insurer.

 By 1997, Children’s Health Insurance Program (CHIP) was created. CHIP plans are essentially Medicaid for children. The plans were designed to help the lower income families seek and pay for healthcare for their kids when they needed it. In 2014, Obamacare, aka The Affordable Healthcare Act, was enacted to help provide insurance at a more affordable rate as well as cover those that were not able to get health insurance due to pre-existing conditions. Currently there are still more people insured than there were prior to Obamacare being enacted, but as the costs of medical care continue to rise, the cost to the insurance companies do as well.

With all of the changes in the medical field, as well as in the costs of healthcare and prescriptions, it is hard for insurance companies to maintain consistent premium amounts. It is hard to say what the right answer is to solve our continued health insurance and healthcare issues but I think at this point, it’s not something we can just put a band-aid on. Instead we really need to look at why these costs are rising and what we can do to regulate them so that the problem gets solved once and for all.

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