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The concept of medical insurance originated with Hugh the Elder Chamberlen in 1694. Medical insurance consists of two types of coverage: 1) coverage for accidental injuries and 2) coverage for sickness. As such, they had different start dates. The Railway Passengers' Assurance Company of London sold the first 'accident' insurance coverage as part of a train ticket in 1848. In 1852, the company expanded it to cover any accident. It was then brought over to the United States by a passenger who had purchased a ticket who then founded the Travelers Insurance Company in 1863. Travelers offered coverage for accidents that occurred during travel. In 1890, the St. Lawrence Life Association issued the first policy that combined sickness with accidental injury coverage. However, it didn't cover medical expenses per se; rather it covered the loss of income incurred by the claimant who was unable to work because of illness. Additionally, there were only a few diseases that qualified.
In 1929 a group of teachers contracted with Baylor University Hospital in Dallas Tx to receive room and board, and medical services for a fee. This would serve as the prototype for a Blue Cross/Blue Shield future medical insurance plan instituted in 1932. Also in 1932, The National Labor Relations Act, requiring management to bargain with labor over "wages and conditions" is enacted and will become a catalyst for employer-based health benefits. From 1932 to 1942, membership in the Blue Cross plans went from 1300 to over 3 million. On December 27, 1933, America's first "Blue Cross Baby" was born in Durham, North Carolina. The entire bill was $60 for the delivery and 10-day hospital stay.
From there, the combination of unions wanting better benefits from employers and a WWII wartime wage freeze (resulting in employers offering more benefits, including medical insurance to entice workers from rival employers) combined to accelerate the medical insurance industry.
So there you have it.
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