Hostname: page-component-848d4c4894-2pzkn Total loading time: 0 Render date: 2024-05-18T19:05:35.969Z Has data issue: false hasContentIssue false
  • English
  • Français

Restraining the Health Care Consumer

The History of Deductibles and Co-payments in U.S. Health Insurance

Published online by Cambridge University Press:  04 January 2016

Beatrix Hoffman
Get access Rights & Permissions [Opens in a new window]

Abstract

Health insurance with high deductibles is an important feature of the Bush administration's health savings accounts initiative. A similar type of insurance, known as major medical, was the most common type of health coverage in the United States from the 1950s through the 1970s. This article traces the history of cost sharing in health insurance from its origins in insurers' concerns about “moral hazard” to the heyday of major medical insurance to the temporary comeback of first-dollar coverage during the era of managed care. Proponents of deductibles and co-payments, today and in the past, have argued that they bring down costs by forcing consumers to make more careful health care choices. The history of major medical insurance, however, shows that high-deductible insurance failed to curb medical inflation and also hurt consumers who expected their coverage to protect their incomes from the costs of sickness and injury.

Type
Articles
Information
Social Science History , Volume 30 , Issue 4: The Persistence of the Health Insurance Dilemma , Winter 2006 , pp. 501 - 528
Copyright
Copyright © Social Science History Association 2006 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Aetna (1921) “Your automobile insurance?” Display advertisement. New York Times, April 21.Google Scholar
American Medical Association (AMA) (1960) Proceedings of the National Congress on Prepaid Health Insurance. Chicago: American Medical Association, Council on Medical Service.Google Scholar
Anderson, Odin (1957) Voluntary Health Insurance in Two Cities: A Survey of Subscriber-Households. Cambridge, MA: Harvard University Press.Google Scholar
Baldwin, Jesse W. (1972) Letter to Edward M. Kennedy, June 18. Box 48, folder 7, Committee for National Health Insurance Collection, Walter P. Library of Labor and Urban Affairs, Wayne State University.Google Scholar
Blue Cross and Blue Shield (BCBS) (1971) “The effect of deductibles, coinsurance and copayment on utilization of health care services—Opinions and impressions from Blue Cross and Blue Shield plans.” Box 8, folder 20, Committee for National Health Insurance Collection, Reuther, Walter P. Library of Labor and Urban Affairs, Wayne State University.Google Scholar
Brecher, Ruth, and Brecher, Edward M. (1961) How to Get the Most out of Medical and Hospital Benefit Plans: A Program for Labor and Management. Englewood Cliffs, NJ: Prentice-Hall.Google Scholar
Bush, George W., Kerry, John F., and Schieffer, Bob (2004) “Debate transcript, October 13, 2004: The third Bush-Kerry presidential debate,” Commission on Presidential Debates, www.debates.org/pages/trans2004d.html (accessed May 10, 2006).Google Scholar
Carpenter, Letty (1998) “Evolution of Medicaid coverage of Medicare cost sharing.” Health Care Financing Review 20: 11–18.Google Scholar
Centers for Medicare and Medicaid Services, Office of the Actuary (2003) National Health Expenditures Projections, 2005–2015: Forecast Summary and Selected Tables. Baltimore: U.S. Department of Health and Human Services, www.cms.hhs.gov/NationalHealthExpendData/downloads/proj2005.pdf (accessed May 10, 2006).Google Scholar
Chamber of Commerce of the United States (1954) A Look at Modern Health Insurance: A Survey of the Voluntary Health Insurance Movement in the United States. Washington, DC: Chamber of Commerce of the United States.Google Scholar
Columbia University, School of Public Health and Administrative Medicine (1962) Family Medical Care under Three Types of Health Insurance: A Report on a Survey Conducted for the Foundation on Employee Health, Medical Care, and Welfare, Inc. New York: Columbia University, Foundation on Employee Health, Medical Care, and Welfare.Google Scholar
Committee for National Health Insurance (CNHI) (1969) Facts of Life, Health, and Health Insurance. Washington, DC: Committee for National Health Insurance.Google Scholar
Committee for National Health Insurance (CNHI) (1976) “The failure of third party insurers.” Box 22, folder 27, Committee for National Health Insurance Collection, Walter P. Reuther Library of Labor and Urban Affairs, Wayne State University.Google Scholar
Commonwealth Fund (1987) Medicare's Poor: Filling the Gaps in Medical Coverage for Low-Income Elderly Americans; A Report. Baltimore: Commonwealth Fund, Commission on Elderly People Living Alone.Google Scholar
Coombs, Jan Gregoire (2005) The Rise and Fall of HMOs: An American Health Care Revolution. Madison: University of Wisconsin Press.Google Scholar
Cunningham, Robert III, and Cunningham, Robert M. Jr. (1997) The Blues: A History of the Blue Cross and Blue Shield System. De Kalb: Northern Illinois University Press.Google Scholar
Dreyfuss, Barbara T. (2004) “Cheap trick.” American Prospect, August 13, www.prospect.org/web/page.ww?section=root&name=ViewPrint&articleId=8345 (accessed May 10, 2006).Google Scholar
Employee Benefits Research Institute (2003) “Health insurance and the elderly,” Facts from EBRI, August, www.ebri.org/pdf/publications/facts/0803fact.pdf (accessed May 10, 2006).Google Scholar
Faulkner, E. J. (1963) “Remarks,” in American Medical Association, Proceedings of the Third National Congress on Voluntary Health Insurance and Prepayment. Chicago: American Medical Association: 20.Google Scholar
Ferdman, R. W. (1977) Letter to Nelson Cruikshank, February 10. Box 56, folder 11, Committee for National Health Insurance Collection, Walter P. Reuther Library of Labor and Urban Affairs, Wayne State University.Google Scholar
Follmann, J. F. Jr. (1958) Voluntary Health Insurance and Medical Care: Five Years of Progress, 1952-1957. Chicago: Health Insurance Association of America.Google Scholar
Freudenheim, Milt (2003) “Workers feel pinch of rising health costs.” New York Times, October 22.Google Scholar
“Georgia Medicaid” (1976) Health Law Newsletter, August.Google Scholar
Gladwell, Malcolm (2005) “The moral-hazard myth.” New Yorker, August 29, 44–49.Google Scholar
Gregg, John E. (1973) The Health Insurance Racket and How to Beat It. Chicago: Regnery.Google Scholar
Hall, Charles P. Jr. (1966) “Deductibles in health insurance: An evaluation.” Journal of Risk and Insurance 33: 254–63.Google Scholar
Health Information Foundation (HIF) (1953a) “Proceedings: First meeting in a series sponsored by the Health Information Foundation,” September 17–18, Princeton, NJ. Box 6, file 9, George P. Bugbee Papers, American Hospital Association Resource Center, Chicago.Google Scholar
Health Information Foundation (HIF) (1953b) “Second meeting of a series sponsored by the Health Information Foundation,” November 5–6, New York City. Box 6, file 10, George P. Bugbee Papers, American Hospital Association Resource Center, Chicago.Google Scholar
Health Information Foundation (HIF) (1954) “Proceedings—Insurance meeting, Health Information Foundation,” February 12, New York City. Box 7, file 1, George P. Bugbee Papers, American Hospital Association Resource Center, Chicago.Google Scholar
Health Insurance Association of America (HIAA) (n.d.) “Statement of the Health Insurance Association of America on the marketing of Medicare supplementary policies.” Box 25, folder 9, Committee for National Health Insurance Collection, Walter P. Reuther Library of Labor and Urban Affairs, Wayne State University.Google Scholar
Health Insurance Council (1955) The Health Insurance Story. New York: Health Insurance Council.Google Scholar
Hensley, Scott (2005) “Taking the ‘co’ out of drug co-pays.” Wall Street Journal, October 25.Google Scholar
Hoffman, Beatrix (2001) The Wages of Sickness: The Politics of Health Insurance in Progressive America. Chapel Hill: University of North Carolina Press.Google Scholar
Hoyt, Edwin P. (1970) Your Health Insurance: A Story of Failure. New York: Day.Google Scholar
Human Rights of Arizona (1981) “Comments on Arizona health care cost containment system bill,” October 7. Box 64, Human Rights of Arizona Collection, Hayden Library, Arizona State University.Google Scholar
Johnson, Haynes Bonner, and Broder, David S. (1996) The System: The American Way of Politics at the Breaking Point. Boston: Little, Brown.Google Scholar
Keeler, Emmett B., Sloss, Elizabeth M., Brook, Robert H., Operskalski, Belinda H., Goldberg, George A., and Newhouse, Joseph P. (1987) “Effects of cost sharing on physiological health, health practices, and worry.” Health Services Research 22: 279–306.Google Scholar
Kennedy, Edward M. (1973) In Critical Condition: The Crisis in America's Health Care. New York: Pocket.Google Scholar
Klein, Jennifer (2003) For All These Rights: Business, Labor, and the Shaping of America's Public-Private Welfare State. Princeton, NJ: Princeton University Press.Google Scholar
Ku, Leighton, and Broaddus, Matthew (2005) “Out-of-pocket medical expenses for Medicaid beneficiaries are substantial and growing,” Center on Budget and Policy Priorities, May 31, www.cbpp.org/5-31-05health.htm (accessed May 10, 2006).Google Scholar
Law, Sylvia A. (1974) Blue Cross: What Went Wrong? New Haven, CT: Yale University Press.Google Scholar
Law, Sylvia A. (1976) “Where does the money come from?” Speech delivered at the Women's Leadership Rally, March. Box 1, folder 31, Committee for National Health Insurance Collection, Walter P. Reuther Library of Labor and Urban Affairs, Wayne State University.Google Scholar
Margolius, Sidney (1962) A Consumer's Guide to Health Insurance Plans. Pamphlet no. 325. New York: Public Affairs Committee.Google Scholar
Marmor, Theodore R. (2000) The Politics of Medicare. 2nd ed. New York: de Gruyter.Google Scholar
Medical Rights Conference (1954) Report, February 20. Vertical file, drawer B-1, “Cooperatives,” Michael M. Davis Papers, New York Academy of Medicine, New York City.Google Scholar
Morris, Charles R. (1996) The AARP: America's Most Powerful Lobby and the Clash of Generations. New York: Times Books.Google Scholar
Munts, Raymond (1957) Catastrophic Illness Insurance: A Barrier on the Road to Health. AFL-CIO publication no. 51. Washington, DC: American Federation of Labor and Congress of Industrial Organizations.Google Scholar
National Broadcasting Corporation (1972) “What price health? NBC reports,” December 19. Transcript in box 41, folder 11, Committee for National Health Insurance Collection, Walter P. Reuther Library of Labor and Urban Affairs, Wayne State University.Google Scholar
Newhouse, Joseph P. (1993) Free for All? Lessons from the RAND Health Insurance Experiment. Cambridge, MA: Harvard University Press.Google Scholar
Newhouse, Joseph P. (2004) “Consumer-directed health plans and the RAND Health Insurance Experiment.” Health Affairs 23: 107–13.Google Scholar
Normand, Charles (1994) Review of Free for All? Lessons from the RAND Health Insurance Experiment, by Newhouse, Joseph P.. British Medical Journal 308: 1724.Google Scholar
Oberlander, Jonathan (2003) The Political Life of Medicare. Chicago: University of Chicago Press.Google Scholar
Phelps, Charles (1982) Health Care Costs: The Consequences of Increased Cost Sharing. Santa Monica, CA: RAND.Google Scholar
Placere, Morris N., and Marwick, Charles S. (1973) How You Can Get Better Medical Care for Less Money. New York: Walker.Google Scholar
Pollack, Jerome (1956) “Major medical expense insurance: An evaluation.” Speech delivered to the American Public Health Association, November 15. Vertical file, drawer B-1, “Major Medical Insurance (Catastrophic).” Davis, Michael M. Papers, New York Academy of Medicine, New York City.Google Scholar
Quadagno, Jill (2005) One Nation, Uninsured: Why the U.S. Has No National Health Insurance. New York: Oxford University Press.Google Scholar
Reed, Louis S., and Carr, Willine (1970) The Benefit Structure of Private Health Insurance, 1968. Research report no. 32. Washington, DC: U.S. Social Security Administration, Office of Research and Statistics.Google Scholar
Relman, Arnold S. (1983) “The RAND health insurance study: Is cost sharing dangerous to your health?” New England Journal of Medicine 309: 1453.Google Scholar
Roemer, Milton I., Hopkins, Carl E., Carr, Lockwood, and Gartside, Foline (1975) “Co-payments for ambulatory care: Penny-wise and pound-foolish.” Medical Care 13: 457–66.Google Scholar
Rubenstein, Sarah (2005) “Care quandary: What's ‘preventive’?” Wall Street Journal, August 24.Google Scholar
“Rx for industry: Needed; Broader and higher health benefits” (1954) Time, March 29, 86.Google Scholar
Schorr, Daniel (1970) Don't Get Sick in America. Nashville, TN: Aurora.Google Scholar
Singsen, Antone G. (1963) “Remarks,” in American Medical Association, Proceedings of the Third National Congress on Voluntary Health Insurance and Prepayment. Chicago: American Medical Association: 4.Google Scholar
Singsen, Antone G., and Morris, Lawrence C. Jr. (1971) Letter to chief plan executives, Blue Cross and Blue Shield plans, September 3. Box 8, folder 20, Committee for National Health Insurance Collection, Walter P. Reuther Library of Labor and Urban Affairs, Wayne State University.Google Scholar
Social Research (1956a) Attitudes toward Health Insurance. Vol. 1, The Extended Benefits Study. Chicago: Social Research.Google Scholar
Social Research (1956b) Attitudes toward Health Insurance. Vol. 2, The Decision Makers. Chicago: Social Research.Google Scholar
Somers, Herman M., and Somers, Anne R. (1961) Doctors, Patients, and Health Insurance: The Organization and Financing of Medical Care. Washington, DC: Brookings Institution.Google Scholar
Starfield, Barbara, and Dutton, Diana (1985) “Care, costs, and health: Reactions to and reinterpretation of the RAND findings.” Pediatrics 76: 614–21.Google Scholar
Stevens, Rosemary, and Stevens, Robert B. (1974) Welfare Medicine in America: A Case Study of Medicaid. New York: Free.Google Scholar
U.S. Council of Economic Advisers (2004) Economic Report of the President: Transmitted to the Congress February 2004, together with the Annual Report of the Council of Economic Advisers. Washington, DC: Government Printing Office.Google Scholar
U.S. Department of the Treasury (2005) “HSA frequently asked questions,” Office of Public Affairs, U.S. Department of the Treasury, www.treasury.gov/Offices/publicaffairs/hsa/faq_basics.shtml (accessed May 10, 2006).Google Scholar
U.S. General Accounting Office (2004) Medicaid and SCHIP: States' Premium and Cost-Sharing Requirements for Beneficiaries. Report no. GAO-04-491. Washington, DC: U.S. General Accounting Office.Google Scholar
U.S. Senate, Special Committee on Aging, Subcommittee on Health of the Elderly (1964) Blue Cross and Private Health Insurance Coverage of Older Americans: A Report. Washington, DC: Government Printing Office.Google Scholar
Valdez, R. Burciaga , Brook, Robert H., Rogers, William H., Ware, John E. Jr., Keeler, Emmett B., Sherbourne, Cathy A., Lohr, Kathleen N., Goldberg, George A., Camp, Patricia, and Newhouse, Joseph P. (1985) “Consequences of cost-sharing for children's health.” Pediatrics 75: 952–61.Google Scholar