The History of Health Care in the United States

Instructor: Pooja Doshi

Pooja has taught college level courses in public health and has a master's degree in public health and policy

The lesson will depict the history of the health care system in the United States and how it has evolved. It will address its various impacts on society as well.

How Has Health Care Changed Throughout Time?

Since its beginning, the American government has believed in the power of capitalism. This is the reason why the United States has never had a health care system that promotes socialistic solutions as the United Kingdom's and Japan's do. Let's take a look throughout history and see how the United States health care system has changed.



This was a time period when steel mill workers formed unions, and in order to avoid large financial losses when they got injured, the unions would offer some medical protection. But these protections were not very well organized and decisions about coverage were not made consistently. These protections didn't really leave the steel mill worker population with any continuing and secure medical care.


The American Association of Labor Legislation (AALL) was one organization that wanted to further health care for low-income and working class citizens. It advocated for legislation that would offer sick leave, cover funeral expenses, and even provide some maternity leave, but professional organizations expressed concerns over who would pay doctors for their work. The union leaders also worried that if workers could get compulsory health insurance on their own, unions would no longer be needed to negotiate these benefits for them, weakening their power.


After World War I, the cost of health care was more expensive. Hospitals and physicians began to increase the prices for their medical services, putting them out of reach for the average person. The first nonprofit insurance company, known as the precursor to Blue Cross Blue Shield (BCBS), was created to help cover hospital services. Nowadays, it is one of the largest insurance providers in the country and is very profitable.


When Franklin Roosevelt, the 32nd President of the United States, was elected, he proposed a health insurance bill complete with 'old age' benefits; however, the American Medical Association (AMA) rejected the idea of national health insurance. The resulting outcome was the Social Security Act (SSA) of 1935. It created benefits for senior citizens and made room for states to develop programs for the unemployed and disabled.


During and after World War II, many U.S. businesses needed to recruit more workers, but could not offer high salaries, so they offered employer-sponsored health insurance. President Truman also decided to re-introduce a national health care plan, but this time he wanted it to cover all Americans, not just the working and low-income class. However, he didn't get much support because the nation's attention turned to the Korean War. Many individuals who could afford to purchase health insurance did so through private organizations.


Although a national health care plan policy was not in play, medicine was advancing, and because of that, the expenses of hospital and medical care doubled. But, nothing was done to change this health care environment.


As the country was tracking National Health Expenditures and seeing them continually increase, President Johnson proposed an extension of the SSA of 1935, which helped lay the foundation for Medicare and Medicaid, two of the main branches of our health care system today.


The American people still did not have access to a universal health care plan; only people who could afford insurance purchased it. It was time yet again to attempt to make a national health insurance plan. A tax-funded, single-payer plan was proposed by Ted Kennedy, but President Nixon did not want the government to have that much control over a citizen's life. Instead, he proposed that employers offer health insurance plans and suggested that the government provide subsidies to those who could not afford to do so. However, due to the Watergate scandal, Nixon's health care plan did not survive, but he was able to include the expansion of Medicare in an amendment to the SSA and help establish the Health Maintenance Organization Act of 1973 (HMO), a directive to create more affordable health delivery services to control costs. However, it didn't really help with the crisis that was the American health care system.


The Consolidated Omnibus Budget Reconciliation Act (COBRA) was formed to allow employees who lost their jobs unexpectedly to continue having insurance through their previous employer, but employees would have to pay the full premium.

To unlock this lesson you must be a Member.
Create your account

Register to view this lesson

Are you a student or a teacher?

Unlock Your Education

See for yourself why 30 million people use

Become a member and start learning now.
Become a Member  Back
What teachers are saying about
Try it risk-free for 30 days

Earning College Credit

Did you know… We have over 200 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.

To learn more, visit our Earning Credit Page

Transferring credit to the school of your choice

Not sure what college you want to attend yet? has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.

Create an account to start this course today
Try it risk-free for 30 days!
Create an account