The Economic Evolution of Health care
July 27, 2015
In the 1920's medical care got better so a lot more people started going to hospitals to receive medical care. Since more people started going to hospitals, the supply and demand had to be met, and the price of care went up. An administrator at Baylor University came up with a health plan after realizing that teachers weren't able to cover their hospital bills on their salaries. Two health care plans, Blue Shield and Blue Cross, was established in the 1930's an offered a plan where the insured would pay a prepaid amount of $6 a year and that would cover 21 days of hospital care. This pre-paid insurance plan became very popular throughout the states. Blue Cross covered hospitalizations and Blue Shield was for medical coverage. Years later other insurance companies began to offer health care coverage.
The Blue Shield and Blue Cross health insurance plans became popular as it migrated to Michigan in 1938 and merged with the doctor's services plan of the Michigan Society for Group Hospitalization (MSGH). This new health plan was renamed the Michigan Medical Service and allowed families with low to moderate income to afford adequate health care. "In 1940, the Michigan Medical Service was completely established and the Michigan Society for Group Hospitalization had more than 175,000 customers from 350 employers. Later, the Michigan Society and Michigan Medical Service were again renamed to Michigan Blue Cross and Michigan Blue Shield" (Blue Care Network).
Over the next 20 years, Michigan Blue Cross and Michigan Blue Shield also made health care coverage accessible to individuals and older adults without group coverage. Michigan Blue Cross and Michigan Blue Shield were doing so well, by 1966, the U.S. turned to them to administer and provide Medicare in the state. By 1975, both of the Blue plans merged together and became Blue Cross Blue Shield of Michigan. "By the...