Brief History of Health Insurance in the U.S.

With the March 31, 2014 deadline for purchasing health insurance, or facing a fine, fast approaching there has been some more discussion about who was the first person, and to what political party did they belong, to come up with universal health care coverage and the individual and/or employer mandate.

Health Care reform in the U.S.1 has been a long and drawn out process. During the Reconstruction2 Era, after the Civil War, as part of the Freedmen’s Bureau set up by Abraham Lincoln health care was provided by the government to freed slaves. The next push for Universal Health Coverage came in 19333 as part of Franklin D. Roosevelts New Deal. However at the time the American Medical Association, and others, attacked publicly funded health care and it was removed. In 1949 President Harry Truman included universal health care in the Fair Deal; however had to remove it again due to opposition by the medical community.

The first indication of legislation proposing an employer mandate was in February 1971. Republican President Richard Nixon proposed limited health insurance reform that included a private health insurance employer mandate that would require employers to offer all full4 time employees health insurance, and federalization of Medicaid for the poor. The5 bill had no support. In February 1974 Nixon proposed another more comprehensive health insurance reform bill, again with an employer mandate to offer private health insurance; and a replacement of Medicaid by state run health insurance plans that would be made available to all with income based premiums and cost sharing.

Since 1970 Democratic Senator Ted Kennedy worked to get universal health insurance coverage passed in some form. In 1977 President Carter wanted any proposed legislation to preserve a role for private insurance companies. In Kennedy’s 1979 proposal he included an employer and individual mandate. It also regulated the private health insurance plans, had no cost sharing, replaced Medicaid through government payment of premiums to private insurers, and enhancement of Medicare.

The Heritage Foundation in an 1989 publication of The Heritage Lectures recommend the Individual Mandate on all households. On page 516 the original description includes stating that each person would have to obtain a minimum level of protection. That each household would be required to furnish proof of insurance when they file tax returns. If a family canceled insurance the insurer was required to notify the government, and if they didn’t enroll in another plan before the original one lapsed they might face a fine. They continue on page 52 to outline that governments role is to monitor the health market, to subsidize needy individuals, and to encourage competition.

In 1993 the Health Security Act7 proposal put forth by Hillary Clinton did contain an Individual and Employer Mandate. Here is a video8 from when Hillary Clinton testified before the Senate Finance Committee in 1993:


SEN. JOHN H. CHAFEE (R-RI): Your plan does have an individual mandate to the extent of the 20 percent.

MRS. CLINTON: Yes, sir.

SEN. CHAFEE: In other words, the individual is responsible for paying a portion of his or her — the employee — insurance. Whereas ours makes the individual 100 percent, yours makes him 20 percent. So it’s a difference of degree more than the total difference.

MRS. CLINTON: That’s right.

In addition the Health Security Act9 in section 1002 (a) outlined that each eligible individual had to be enrolled in an applicable health plan and pay the premium required. Section 1323 (I) stated that if the person did not have coverage they would be auto enrolled in insurance once they went for health care services, and would have to pay twice the back premium in penalty; unless they could establish good cause for failure to enroll in a timely manner.

It is fair to say that a lot of people over the course of the country’s history, for good or bad, had a hand in creating legislation that ultimately led the way to the Affordable Care Act.



1 History of Health Care Reform in the United States (

2 Reconstruction Era (

3 Ibid 1

4 Nixon 1971 Proposal (

5 Ibid 1

6 Critical Issues Revised Edition A National Health System for America (

7 H.R. 3600 (103rd) Health Security Act (

8 Hillary Clinton Testifying in front of Senate Finance Committee 1993 (

9 Ibid 7



8 thoughts on “Brief History of Health Insurance in the U.S.

Add yours

  1. Roseylinn, excellent post and very detailed. Taking it two steps further, Senator Bob Dole proposed a model that would provide insurance options in his presidential run, borrowing some from the Heritage model. This was to counterbalance Hillary Care which was a national health insurance model. Then, we have the Romneycare model which borrowed from the Heritage model which led us to Obamacare.

    I wrote a letter to the editor today in response to one more Tea Partier who hates Obamacare. I noted the irony that Tea Party leadership loved Romneycare until Obama copied features of it Jim DeMint particularly liked the individual mandate saying it caused “personal responsibility” but he disowned both when he said Romneycare and Obamacare were unconstitutionaland when Romney ran for president. I encourage people to Google Jim DeMint and Romneycare and read for themselves.

    It interests me that Richard Nixon pushed change as that coupled with getting the EPA through may have been his two best domestic efforts. Again, great post and thanks for the cites. BTG


    1. Thanks. It all goes to show that health care reform is not new to this country, and a lot of the “new” ideas aren’t really that “new”. Just have to dig a little bit into history to find out where they actually came from.

      Thanks for the comment. I agree that people should research things for themselves and not just take what they hear online, in the news, or from chain emails at face value.


      1. Roseylinn, on this and other topics, it is far easier to get their “news” from sources they believe even when that source is saying and printing news inconsistent with data and history. Several names come to mind. Again, great, thorough post, BTG


        1. It isn’t just the usual suspects that are guilty of not accurately reporting the news and facts. Last night my local news station did a story on Obamacare. The news reporter made several incorrect statements that anyone who has read any headline or news story that discussed the health care law would know was wrong. The majority of the segment was overall negative towards young people getting coverage, and emphasized that the entire law is in jeopardy of failing.


  2. You are so right. People don’t understand the principal of insurance. Yes, you want the preventive aspects at low or no cost, but the real reason is to keep from being bankrupt or severely depleted from a major medical expense. As a parent, I am covering my adult children while in college and probably for my oldest son in an entry level job, but if I did not I would make sure they covered themselves. As for it failing, you and I know it is not as it has passed 5 million in the exchanges, not counting the Medicaid expansion, the adult non college kids under 26 and people who signed up for their employer plan to avoid the penalty, which does not show up in the numbers, but every consulting firm predicted would happen.


    1. Last article I saw said that they had just passed 5 million and have until the 31st to get to 6 million. I’m not expecting the actual numbers to be known until after March 31st. President Obama has stated that they have enough people enrolled.

      It will take a while for all the dust to settle before anyone knows if the law was successful or not.


      Watch President Obama’s Interview with WebMD Readers (


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