A Brief Introduction to Private Healthcare Insurance
The success of Blue Cross and Blue Shield encouraged private insurance companies to target the healthcare industry. The introduction of private insurance to the healthcare industry marked the beginning of a lifetime of wealth, age, race disparities in access to healthcare. Commercial insurance companies soon realized they could avoid much of the risk or "adverse selection" problems by focusing on providing insurance to employed workers. In general, insurance companies targeted blue or white collared workers. This decreased much of the financial risk for insurance companies as much of the people they were insuring were young, health insurance who didn't have costly medical needs. Insurance companies soon realized they could turn a bigger profit by expanding their insurance services to a greater variety of people while charging them different rates. For example, insurance companies would charge sicker people with higher premiums and healthier with lower ones. "As a result, commercial companies could often offer relatively healthy groups lower premiums than the Blue Cross and Blue Shield plans, and gain their business" (Thomasson). This perpetuated the already existing wealth and health disparities that have only gotten worse.
Sources Cited:
https://eh.net/encyclopedia/health-insurance-in-the-united-states/