How did Healthcare Come About in the United States?

As the nation went to war in the early 1940s, many able-bodied men went overseas and competition for workers began to increase. In order to lure new employees, American companies had to resort to new tactics, one of which was offering health insurance as part of a more attractive benefits package. That became the basis for today's system - where costs are spread across a large group of people, and the healthy help pay for the sick.

In the 1940s, the growing strength of the unions gave workers more bargaining power, and a tax-free, employer-sponsored health program became a common concession.

In the 1950s, healthcare became even more sophisticated as a host of new medicines became available, including antibiotics to fight infection. Unfortunately, the cost of treatment continued to rise, and those without employer-based healthcare had to pay cash, or not see a doctor at all.

By the dawn of the 1960s, companies across the nation began to offer health insurance in response to the rising costs of medicine, treatment, and newer, more sophisticated procedures. Also during this time, Medicare and Medicaid were implemented, allowing the elderly and poor some government-sponsored protection from rising costs.

During the 80s and 90s, health costs rose rapidly. As a result, most employer-sponsored health plans changed from the more expensive pay-as-needed plan to a plan that allowed third parties to set up fee structures and manage costs. By the mid 90s, the most common type of health plan was managed care.

Today, managed care is still fairly common in US healthcare, especially as a PPO plan, though it is losing popularity as more consumer-driven plans are introduced. Health insurance is still typically available through your employer, who negotiates coverage for the whole group of employees to lower costs.

If you're self-employed or unemployed, you typically have three options: Take a big financial risk and go without medical coverage, pay full price for every medical procedure at rates that haven't been prenegotiated, or purchase your health insurance on the open market.

Summary of U.S. Healthcare History

Health coverage came about as healthcare became more sophisticated and expensive. And you typically get it through your employer, on the private market, or through the government in the form of Medicare and Medicaid.