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California Health Insurance - A Brief History

Important Landmarks

  • 1929 - Ross-Loos Clinic opens in Los Angeles, first prepaid group practice of physicians provides medical care for workers in city's water department.
  • 1937 - California's Blue Cross hospital insurance established.
  • 1938 - Blue Shield physician insurance established.
  • 1945 - Kaiser's "Permanente Health Plan" offered to the public, having served dam, steel, and ship-building workers.
  • 1959 - Federal Employees Health Benefits Act.
  • 1962 - CalPERS allowed to provide health insurance benefits to State of California employees.
  • 1965 - Medicare and Medicaid established.
  • 1971 - Medi-Cal coverage via capitated "prepaid health plans" authorized in reform package of Governor Ronald Reagan.
  • 1973 - Federal Health Maintenance Organization Act.
  • 1975 - Knox-Keene Health Care Service Plan Act.
  • 1979 - HMO Act Amendments remove barriers to for-profit operations.
  • 1982 - California legislation enables preferred provider contracting, launching PPO product trend.
  • 1985 - HMO enrollment reaches 6.2 million, 23% of population.
  • 1993 - State expands county-based Medi-Cal managed care.
  • 1997 - Children's Health Insurance Program established.
  • 1999 - California's Patient Bill of Rights.
  • 2003 - Medicare Part D established.
  • 2010 - Commercial enrollment is dominated by managed care; 53% HMOs; 24% PPOs; and 23% self-insured plans.
  • 2010 - Health Care Reform - The Patient Protection and Affordable Care Act.

Product and Plan Trends

  • 1960 - 1980 Indemnity insurance dominates, except for Kaiser, which covers about 5% of the population in 1960 and 14% by 1980.
  • 1973-1980 HMOs spring up, many originating with county medical societies, others as arms of more traditional insurers.
  • 1983-1990 PPOs go from covering zero in 1980 to a third of California's population by 1987.
  • 1985-2005 Consolidation of health insurance plans from over twenty companies to six.

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