HEALTH INSURANCE. An insurance arrangement for the purpose of providing in demnity for losses sustained because of sick ness, these losses being largely of two kinds— loss of earning capacity during the duration of the disease and cost of medical and other aid necessary for recovery. It is known through out many countries as sickness insurance (Krankenversicherung, L'assurance maladie), but the term °health insurance') was popularized in the United States by the British National Health Insurance Act of 1911, and this term was adopted in 1915 in discussions of this sub ject, in this country. From the view of insurance organization three generic forms of health insurance may be recognized: com mercial health insurance, mutual health insur ance and social health insurance. See Socua. INSURANCE Commercial health insurance is being sold to an increasing extent by so-called casualty insurance companies in the United States and Great Britain and to some extent on the Con tinent. It is a comparatively new branch of the private insurance business, grew out of the accident insurance business and is largely written in connection with accident insurance policies. For many years insurance companieS were fearful of writing this business because of the assumed difficulty in avoiding malinger ing. The earlier policies were limited to cer tain specified diseases, but though such limited contracts are still in the market, they are less popular than insurance against disability due to any disease. The benefits under this form consist of weekly payments of a specified amount for a limited number of weeks, 26 weeks or 52 weeks or even a longer time. Sel dom, if ever, do these contracts provide for the furnishing of medical aid or reimbursement for the expenditure for such medical aid.
Mutual Health or Sickness Insurance.— The above described form of commercial health insurance, largely bought by the lower strata of the middle class, occupies only a very small place in the development of health insurance. Mutual health insurance has accom plished very much larger results. Since the continuous possession of good health and the capacity to work is a matter of particularly grave moment to the wage-worker, as compared to other social groups, It is not surprising to find that in most civilized countries the early efforts toward mutual health insurance were made by wage-workers through their manual aid societies. Informal mutual assistance gradually
developed into systematic mutual insurance, and largely against the hazards of sickness. Thus developed the strong Krankenkassen of the Germanic countries, the Societes de secours mutuels of France and Belgium, the Society di Mutuo Soccorso of Italy, the friendly societies of Great Britain and the fraternal orders of the United States. In some countries this develop ment reached very substantial dimensions, es pecially during the last 50 years. There are millions of members in these societies in France as there were in Great Britain 'before the in troduCtion of the National Insurance Act of 1911.
Notwithstanding this substantial growth, some definite limitations are recognized to the usefulness and efficiency of this form of sick ness or health insurance. The need for sif bene fits is greater as one goes down the economic lad der. It was usually found, however, that be cause of the cost, largely the higher groups of the wage-working class insure while the un skilled, low paid laborer seldom purchases such protection. And because the workmen cannot pay much, the service of these mutual insurance societies is usually meagre and inefficient.
Social health insurance is usually meant even when the shorter term °health insurance) is used, because of the recognition of the great importance of health for the wage worker or any other person of modest earnings. The social form presupposes some systematic effort of organized society to extend the bene fits of health insurance through appropriate action. Simple regulative legislation has been found to have very little effect and can hardly be expected to have any important effect. It is seldom included under social insurance, un less something more substantial is offered by the state or government — either financial sub sidies, or the compulsory principle or both.