A Brief History of Employer-Sponsored Healthcare [From the 1930s to Now]
As Americans continue to debate the impact of the Affordable Care Act (ACA), perhaps a quick look at the historical timeline of employer-sponsored healthcare will provide context for the state of American healthcare as it exists today.
Before the 1930s, the American public largely paid its own way where medical costs were concerned. With the exception of a few industries, employers by and large had little motivation to provide health coverage. Americans who worked in dangerous professions like mining, steel, and railroads had access to company doctors in industrial clinics or union-operated infirmaries. Though this was not healthcare as it exists today, these company-sponsored clinics were some of the earliest precedents of businesses becoming involved in their employees’ well-being.
The '30s: The Great Depression
After his election to the presidency in 1932, Franklin D. Roosevelt chose not to pursue universal healthcare coverage. Several factors influenced his decision, not the least of which was major opposition from the American Medical Association. Roosevelt toyed with the idea of nationalizing healthcare as part of his plan for Social Security. However, he was a politically astute man, and he realized that tying universal health coverage to the Social Security Act might doom both initiatives to failure.
Of course, Roosevelt's decision left unresolved the pressing need of many Americans for some way to deal with healthcare costs. In the grips of the Great Depression, many were hard pressed to find money for essentials like food and shelter. Healthcare often fell by the wayside for families working to access the basic necessities of life.
Into this environment came the beginnings of private health insurance. Blue Cross and Blue Shield plans paved the way for private insurers to begin crafting plans to meet the needs of the growing market. Still, at this stage, employers were not generally in the picture, and these original health insurance offerings were purchased almost exclusively by individuals.