Final Answer:
Health insurance became established in the United States during the early 20th century, with the first employer-sponsored plans emerging around the 1920s.
Step-by-step explanation:
In the early 20th century, healthcare in the United States underwent significant changes. Before the establishment of health insurance, medical expenses were primarily paid out-of-pocket by individuals.
However, the rising costs of healthcare services prompted the need for a more structured financial system to cover medical expenses.
The first significant development in health insurance in the U.S. occurred in the 1920s when employers started offering healthcare coverage as part of employee benefits packages.
During this time, the Baylor University Hospital in Dallas, Texas, played a pivotal role in the evolution of health insurance. In 1929, the hospital introduced a prepaid plan for teachers, which is often considered the precursor to modern health insurance.
The plan allowed teachers to pay a fixed monthly fee in exchange for comprehensive medical services.
This marked the beginning of employer-sponsored health insurance plans, laying the foundation for the employer-based healthcare system that is prevalent in the U.S. today.
The idea of employer-sponsored health insurance gained traction, especially during and after World War II, when the federal government introduced wage controls.
To attract and retain employees without violating wage restrictions, employers started offering health insurance as a non-wage benefit.
This practice became more widespread, leading to the establishment and expansion of employer-sponsored health insurance plans across the country. This historical development laid the groundwork for the complex and diverse healthcare insurance landscape in the United States.