How We Payed For Healthcare In The Past

There was a time when the government didn’t tend to the care of her citizens like we do now.  I was researching another post or comment or something and came across this:

While the health care community and academics searched for a single insurance plan for delivering health care, the absence of regulation left individual Americans free to solve the problem on their own. They proceeded to do so, aided in the effort by a number of medical entrepreneurs.

In spite of the price increases, most people still paid for medical care out of their own pockets.  Estimated health expenditures in 1929 were $3,649 million. Of that, consumers paid $2,937 million, public sources paid $495 million, and philanthropy paid $217 million.

Employer plans covered only a tiny minority of people. Most sickness insurance was provided by mutual benefit associations unrelated to work—fraternal societies like the Loyal Order of Moose, the Knights and Ladies of
Security, the Ladies of the Maccabees, and the Société Française de Bienfaisance Mutuelle, which built San Francisco’s French Hospital in 1852. According to Stewart, there were thousands of fraternal societies operating in New York’s Lower East Side at the beginning of the 1900s. Existing for the benefit of their members and offering benefits that were not contingent on employment, many of the societies “employed or contracted with physicians to care for dues-paying members for as little as $1 to $2 per year per member. In some eastern and southern cities, a third to a half of some ethnic groups depended on these organizations for medical care. In New Orleans 88% of the entire population was said to be covered by some form of prepaid ‘contract medicine,’ also known as ‘lodge medicine’ by 1888.”

Historian David Beito estimates that in 1910 at least one-third of adult males belonged to fraternal societies that provided nearly every service of the modern welfare state “including orphanages, hospitals, job exchanges, homes for the elderly, and scholarship programs.”  Fraternal societies had a number of competitors including “commercialgroup plans, government workmen’s compensation programs, trade unions and industrial unions, company-sponsored mutual benefit societies, and other fraternal orders that provided life insurance or non-stipulated (discretionary) relief.”

Before the government intervened to solve our healthcare crisis, we were doing it ourselves.  We banded together, formed our own organizations and took care of each other.

However, there was one thing going FOR those social organizations that is missing from the government run programs; accountability:

The fact is that the fraternal societies knew their members gave them an advantage in issuing disability and sickness insurance. Lodges had home visiting committees that helped uncover false claims and one or two week waiting periods requiring members applying for aid to shoulder some of the financial load. Unlike many of the public proposals, the societies also had behavioral requirements that made life less attractive while receiving payments. Emery
reports that fraternal groups could require that “members receiving benefits could not drink or gamble and in some cases were not allowed to be away from their residence after dark.”

The fraternal societies were made up of friends, neighbors and associates.  Further, they worked to prevent fraud and ensure that a life of leisure while accepting benefits wasn’t allowed.

A sad cry from where we are today.


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