Today’s term is one of the tenets of modern healthcare. Along with housing assistance, unemployment compensation, nutritional assistance and child care programs, it forms the basis of social welfare programs in many countries. Typically, we don’t think of it until we really need it, but, with the cost of healthcare ever-increasing, many of us wouldn’t be able to afford quality healthcare without it. That being said, most people don’t really know much about the history of how it came to be, so let’s take a look at health insurance.
The term itself is a compounding term which seeks to “insure against financial loss due to illness or injury”. The combination comes from the word health, originally from the Proto-Germanic hailitho, meaning ‘whole, uninjured, or of good omen’, and the word insurance, which is a variant of ensurance, meaning ‘an assurance or guarantee’, originating from the Old French term enseurance.
While the term was first mentioned in a 1901 edition of the Index-Catalogue of the Library of the Surgeon General’s Office, U. S. Army as a heading titled “Health-insurance”, the concept goes back further than we may imagine. Before the advent of widespread health insurance on a national level, there were forms of proto-health insurance which provided aid to minimise the economic risk of personal injury or illness. Examples of this can be seen in the “Friendly Societies” or “Saturday funds” which gave assistance in 19th century Great Britain, or, indeed, in the craft/artisan guilds of medieval Europe and imperial Rome.
In more modern terms though, health insurance is largely the product of the industrial revolution, the welfare state, and the nation-state. Though industrialisation increased the awareness of and need for health insurance, voluntary participation often meant that participation levels were low, programs weren’t administered properly, and benefits were inadequate. To make these programs more adequate and expansive, Germany, building on a foundation of earlier programs in Prussia and Saxony, passed the first compulsory national health insurance law in 1883; however, this was due to more than simple benevolence: the goal was to provide better care for working classes in order to stem the outflow of immigrants and assist German industry.
Again, though the concept of private insurance had already existed for decades, the first mention of health insurance legislatively in English occurs in the 1911 Acts of the Parliament of the United Kingdom (under King George V), specifically under the National Insurance Act of 1911, which states that: “National Health insurance… All persons so insured..shall be entitled..to the benefits in respect of health insurance and prevention of sickness.” According to the law, “All workers who earned under £160 a year had to pay 4 pence a week to the scheme; the employer paid 3 pence, and general taxation paid 2 pence”.
Whether private and/or supplemental or compulsory and governmental, insurance seems to be becoming more and more necessary. By 2020, global healthcare spending is projected to reach EUR 7,5 trillion, occupying 10.5% of global GDP; moreover, while transitional economies will see the greatest rise in costs, virtually no region will be immune to rising costs. So, while an ounce of prevention may still be worth a pound of cure, it never hurts to have some help when it comes to paying for that prevention.