How Did Healthcare Insurance Become an "Entitlement"?

Prior to the Civil War, healthcare -- such as it was -- was entirely the responsibility of each person. After the civil war, employees in certain industries with high rates of injury -- mining, steel, railroads, riverboats, lumber -- had access to company doctors, at he company’s expense, for job-related injuries and illness. As insurers grew more sophisticated, they began selling “accident” policies that included disability, death and burial benefits to EMPLOYERS to cover these costs incurred by their EMPLOYEES. Such were the origins of what has evolved today as "healthcare insurance".

Until well into the 20th century, general healthcare -- such as it was -- was not a major expense. The wages lost by workers for time lost to illness was something like four times as expensive as the medical care itself. Medical procedures were rudimentary by today's standards. Hospitals were generally mental wards and homes for the indigent.

A few socialist sought a system of “compulsory” sickness coverage that would pay for medical costs and disease prevention for all workers but the concept was generally disliked. Indeed, a 1918 ballot measure to create a statewide insurance program in California failed badly. By 1920, the concept of national, compulsory insurance was dead.

With the advent of sulfa drugs in the 1930's and penicillin in the early 1940's, previously incurable diseases became curable. Modern medicine and a demand for it was born. And, so was modern healthcare insurance.

With hospitals desperate for new revenue streams during the Great Depression, a group of 1,500 Dallas-area teachers offered to prepay premiums to the Baylor Hospital in exchange for up to 21 days of future care. So it was  that Blue Cross and healthcare insurance for individuals came into being. Other such plans soon blossomed across the county.

Yet, in 1940, less than one in ten percent of the U.S. population had any kind of healthcare coverage. World War II soon came and so did a freeze on salaries and wages. But, alas, employers could offer healthcare insurance paid by the company as an incentive to hire the best employees without it  being counted as salaries and wages but as an un-taxed employment benefit.  To remain competitive in the labor market, more and more businesses eventually offered company-paid healthcare insurance. Today, one in every two Americans have healthcare insurance provided wholly or in part by employers.

Of the remaining half of the population, the vast majority were those unable to work or worked in low-paying jobs without health benefits, and those who were beyond working age. So it was that, for the first time in the history of the United States, the government began providing socialized healthcare in 1964 with the Medicare program for seniors aged 65 or greater and the Medicaid program for uninsured under the age of 65. Both were entitled healthcare programs funded in part by a Federal Insurance Contributions Act (FICA) flat tax of  1.45% on income by paid by the employees for Medicare and an an equal FICA tax of 1.45% pay by the employer. This, of course, is in addition to the Social Security portion of the FICA tax of 6.2% paid by both employee and employer.

The result is that 82% portion of the population have never lived in a time when healthcare insurance was not available in some form to nearly everyone. Indeed, those with healthcare insurance coverage today has increased to more than nine in ten, up from one in ten in 1940, with many feeling entitled to it ... regardless of who bears the burden of its cost or why.