New technology in healthcare has opened the avenues to get treatment for difficult health conditions thereby also reducing the mortality rate. However, with this development the cost of health services also shoot up and it became necessary for the government to chalk out practical health care insurance plans to ensure quality health care services to all sections of the society.In early 20s, the healthcare was not so developed. The rate of mortality was high and many conditions were still undiagnosed. The people used to pay for visit fees and for nominal medical services. The overall cost of treatment was less as most the medical practices involved the use of common medications including those in surgery. The early diagnostic techniques were limited to the use of blood pressure machine and X rays. Those who still could not pay for the services with currency, used to get treatment in exchange of some goods or from the charity organizations which run or supported free treatment of diseases. There were still many who cannot afford a medical treatment and were a cause of worry. Most popular insurance in place was sickness insurance. Due to progressivism in Europe and the United States, many social welfare acts and private subsidized health care programs started to emerge. Sickness insurance provided by the employer-based sickness funds or labor unions covered only the worker not the spouses or dependents. In this manner, they represent more likely the modern day disability funds rather than regular insurance.
The coverage was provided for the time the employee served in the company, not in case of losing job or job switch. Medically necessary treatments were provided to the employee completely at the expense of the company under certain conditions of employee’s designation and attendance record. Under this scheme, the urban employees were getting better coverage than their rural counterparts. Sickness funds improved the impression of industrial sector with growth in employment and better employee retention. With this progressed the trend among industries and trades to come up with more practical and compulsory insurance plans for their employees.
The United States in comparison to European countries was more liberal and thus less intrusive in the businesses. The insurance plans would have required a constant income flow with controlled contributions from employers and works in form of taxes, etc. The American government being decentralized left the roles vested with the private organizations only. It is only with the active role of labor unions that compulsory insurance plan came into force, lending a dimension in better working societies and businesses. The pros and cons of healthcare coverage were discussed and the industries recognized that compulsory sickness insurance will add to their profits by cutting down cost of employee training and retention.
The sickness insurance was the most primitive of modern day insurance plans. There were no methods to qualify a person for reimbursement. It was possible for a healthy person to claim a refund for medical services which were falsely projected as undertaken or the marginal coverage may fail when it was meant to cover for necessary medical services but the refund was solicited for high cost medical services and expenses.