Insurance was a latecomer to the landscape of American. When it finally did make it over, insurance was supported by one of the most famous Americans in history of it. Let’s have a look at the history of insurance in US Healthcare system.
American Insurance and the Benjamin Franklin:
Not content with the titles of scientist, statesman, author or inventor, Benjamin Franklin added insurer to his collection. In the year of 1752, the Philadelphia Contribution ship for the Insurance of Houses from Loss by Fire. Became the first mutual fire insurance company in America history.
But as the cities grew, developers built then homes very close to each other also the same reasons. Which they do today—to fit as much homes as possible on their development plots and on their lands.
Life and Home Insurance:
The Philadelphia Contribution ship for the Insurance of the Houses from Loss by Fire set new standards for buildings and houses because the company refused to insure the houses they considered fire hazards. Seven years later, Franklin was also instrumental in getting the first life insurance company in America, the Presbyterian Ministers’ Fund, off the ground.
The different religious authorities at that time were outraged at the practice of putting a value on the human life. But criticism cooled when it was seen that insurance worked to protect widows and orphans as well. The Industrial revolution then brought the necessity of both the disability insurance and the business insurance to the forefront.
The year of 1864 saw the Travelers Insurance Company sell its first accident policy. The year of 1889 saw the first auto insurance policy. With the risks of an increasingly modern life and according to the new demands.
Fraud, Scandal and Regulation:
With the explosion in the insurance products and companies issuing them as well. These ranged or stretched from issuing the companies. Without the actual capital to pay claims running instead or alternative like fragile Ponzi schemes. To the insurers who demanding unfairly high premiums or forcing out competitors in an attempt to create a monopoly in this field.
In the year of 1935, the Social Security Act came into the effect. Which was providing unemployment compensation and retirement benefits as well. This act took away some of the insurance companies’ territory. And it sent a clear signal from the government that encouraged. The industry to begin regulating itself for fear of more government involvement in this field.
US Healthcare System
World War II brought a wage freeze, and companies, desperate to attract the workers still in the country, started offering health insurance and group life. Those big policies went to companies large enough to handle or grip them. This act swelled the big guys and starved out the little guys from this field, along with the most of the fly-by-night rabble. In the year of 1944, the Supreme Court formed a new rule that insurance should be federally regulated. But the Congress passed another act of McCarran-Ferguson in 1945, returning control to the state level in America.
The control remains mainly in the United States at the state level to this day. Gender and other factors too, the insurance industry has become more affordable and egalitarian for the public in United States. It has also become more complex to respond to the needs of the business and other fields too. The size of insurance companies continues to increase because they merge with each another and some other giants too in the financial industry. Now insurance policies can be found at institutions who are offering a range of financial Services in the United States of America.
Investing in Insurance:
Insurance business is always in demand because the businesses and the people are always looking for ways to minimize their risk. The demand and range of coverage available has caused insurance policies to increasingly become investments in and of themselves.
If a succession of regular disasters or mega-disaster occurred, the insurance industry has begun to repackage its risk in catastrophe-linked securities that trade on the market and mitigate insurers’ risk.