A Brief History of Under 65 Health Insurance in America for the Self-Employed and Uninsured Workers

When you're self-employed or work for an employer that doesn't offer health insurance, understanding your options is critical—and often frustrating. To fully grasp where we are today, it's helpful to look back at the history of health insurance in America, particularly for those under age 65 without access to employer-sponsored plans. In this blog post I dive into the evolution of health coverage for independent workers, freelancers, and others navigating the individual insurance market.

The Early Days: Pre-1940s

Before World War II, most Americans paid out-of-pocket for medical care. The concept of "health insurance" as we know it barely existed. Some nonprofit organizations and private companies offered limited coverage, but these were primarily for hospital visits, not comprehensive medical needs. Self-employed individuals either paid cash for care or went without.

Employer-Based Coverage Emerges: 1940s–1960s

During World War II, wage controls prevented companies from increasing salaries to attract workers, so they started offering health insurance as a benefit. The IRS ruled in 1943 that employer-provided health insurance was tax-free, accelerating its adoption. By the 1950s, job-based insurance became the norm.

But for the self-employed and those without benefits, choices were few and far between. Individual plans were limited, expensive, and often excluded people with pre-existing conditions. There was no national standard or marketplace.

The Rise of Individual Plans: 1970s–1990s

By the 1970s, a growing number of insurers began offering individual health policies. However, these plans were not regulated uniformly across states. Many applicants were denied coverage, charged more based on health history, or offered plans with minimal benefits.

For the self-employed, the 1986 passage of COBRA allowed temporary access to group health plans after leaving a job, but it was typically costly and short-lived. Then in 1996, the Health Insurance Portability and Accountability Act (HIPAA) gave people more rights to continue coverage, but it still didn’t guarantee affordable care for the long term.

The Affordable Care Act: A Big Change in 2010

Everything changed with the introduction of the Affordable Care Act (ACA) in 2010. For the first time, insurers were prohibited from denying coverage due to pre-existing conditions. Health plans had to include essential benefits, and subsidies became available to help lower-income individuals—especially self-employed workers—afford insurance.

The ACA also created the Health Insurance Marketplace, where anyone without employer-based insurance could compare and buy standardized health plans. This helped make coverage more accessible and predictable for millions of freelancers, gig workers, and small business owners. While the ACA is far from perfect, I think it was a step forward for those who where previously uninsurable finally be able to attain coverage.

The Current Landscape: 2020s and Beyond

Today, under-65 individuals who are self-employed or without job-based insurance have multiple options:

• ACA Marketplace plans (with income-based subsidies)

• Medicaid (based on income and state eligibility)

• Short-term plans (these can be a good fit for some and sometimes can be 3 years in duration)

• Hospital Indemnity plans (these can also be a good fit as long as the client understands what they are getting and exactly how it works and how to use it- which is where I come in)

  
  

Tax rules have also improved for the self-employed. Health insurance premiums can often be deducted as a business expense, reducing overall tax liability.

While challenges remain—like rising premiums and limited provider networks in some areas—the market is more robust than ever with many public marketplace options as well as various private insurance options for those that may not be a good fit for the marketplace.

Why This Matters to You

If you're self-employed or lack employer coverage, understanding this history can help you understand better understand the coverage options available to you. At Wellness Insurance Partners, we specialize in helping individuals under 65 navigate their health insurance options with clarity and confidence, all at no cost to you.

Need Help Finding the Right Coverage?

I'm Joel Zimmerle, an experienced Medicare and health insurance broker. Whether you're self-employed, or your current employer just doesn’t offer coverage, I can guide you through your options to find a plan that best fits your needs and budget.

📞 Call or text me today at 615-579-7592

📧 Email: joel@wellnessinsurance.info