The History of Health Insurance in the US: Part II

Part II takes us through the passage of the Social Security bill in 1935. Social Security was intended to be “social security” including unemployment insurance, a national health plan, national health insurance, accident and disability insurance, old age pensions, and industrial accidents insurance. It never materialized to be true social security because of opposition from so many groups such as the AMA. Roosevelt only presented to Congress what he knew would be accepted. Unfortunately Congress didn’t have the same strength-of-character that Roosevelt had.

• By 1917 most medical professionals and agencies supported the need for health insurance legislation at the federal level. There was also opposition from sectarian groups because they were excluded and pharmacists who thought it would cost them business while they would have to contribute to their employee’s health insurance.
• In 1917, the president of the American Federation of Labor (AFL), Samuel Gompers, stated before the U.S. House of Representatives that when it came to federally funded health insurance, workers would rather rely on themselves than the government. He actually said that federally funded health care would promote workers to leave jobs because they would be guaranteed insurance wherever they worked.
• At the same time, many of the private health insurance companies formed the Insurance Economics Society of America which blocked passage of any health insurance legislation.
• The gains of the AALL were halted in 1917 by our participation in World War I.
• Opponents of mandatory federal health insurance used the rising tide of anti German sentiments to stop all legislation by claiming that federal health insurance was a German concept and should be avoided at all costs.
• The outpouring of anti German sentiment, fear of anything sounding like socialism, and higher physician incomes prevented any growth in federally funded health care through the 1920’s.
• The depression in 1929 started a steep decline in hospital receipts and physician incomes and a renewed interest in health insurance within the medical community.
• In 1929, the first modern group health insurance plan was established. Justin Ford Kimball, vice president of Baylor University in Waco, Texas, headed the Baylor College of Medicine, School of Nursing, College of Dentistry, and the university hospital. He developed a health plan that guaranteed teachers 21 days of hospital care for 50 cents a month. This became the prototype for the Blue Cross plans.
• In 1934, the cross symbol was first used in an advertisement for the Hospital Service Association, today known as Blue Cross and Blue Shield of Minnesota.
• In 1939, the Chicago-based American Hospital Association began using the Blue Cross symbol to signify that health plans across the country met certain standards.
• The Blue Shield concept grew out in the lumber and mining camps of the Pacific Northwest about the same time Justin Ford Kimball, vice president of Baylor University, created his plan. The plan would provide medical care by paying monthly fees to medical service bureaus composed of groups of physicians.
• The Blue Shield symbol was created in Buffalo, New York by Carl Metzger in 1939, and the first official Blue Shield plan was founded in California that same year.
• In 1935, the Social Security Act is passed but national health insurance is omitted.