Friday, September 18, 2009

Health Insurance in the 1850s

In 1852 when the Old Colony Mutual Health Insurance Company was established in Middleborough, commercial health and accident insurance was a novel idea. Only five years earlier in 1847 was "sickness insurance" first offered by Massachusetts Health Insurance, a Boston-based firm, while the Franklin Health Assurance Company of Massachusetts had begun offering accident insurance only in 1850. At the time, most health and accident insurance worked more like modern disability insurance, compensating policyholders for the loss of income in the event of illness or accident. Nonetheless, firms offering these new forms of insurance were revolutionary, so much so that many of them, including the Old Colony, would discontinue operations within months of being established.

In 1852, a group of southeastern Massachusetts men, led by a large contingent of professional and businessmen from Middleborough, established the Old Colony Mutual Health Insurance Company. Based in Middleborough, with offices in the Wells Block on (North) Main Street, the firm had a 13 member directorate consisting of Peter H. Peirce, William H. Wood, Philander Washburn, Sidney Tucker, Eliab Ward, Attorney Everett Robinson, Noah C. Perkins and James Harlow of Middleborough; Foster Hooper of Fall River; Dr. Samuel Shaw of Wareham; Attorney C. B. H. Fessenden of Sandwich; Attorney Amos Otis of Yarmouth and Dr. John Pierce of Edgartown. (Washburn appears to have withdrawn from the board in late October or early November, 1852). Officers of the company were Wood, president; Perkins, vice-president; Harlow, general agent; and Tucker, secretary and treasurer.

The avowed purpose of the company was "the mutual relief of its members in case of sickness or accident." As only a few items survive from the company, it is not clear how this relief was provided, though it is unlikely that provision was paid for the payment of medical bills. More probable was that the company paid a settlement in the event a policyholder was incapacitated by sickness or injury. Unlike other early health insurance providers, however, the Old Colony provided members with annual plans rather than one based upon a lifetime commitment. "Profiting by the experience of other Similar Companies, and determining to place this Association upon a firm and permanent basis, the Directors have fixed the terms of membership 25 per cent higher than those of some other similar Associations. They have also determined to issue Policies for a term of years, instead of life. With these and other safeguards which are thrown around this Institution, the Directors feel confident that by judicious management on their part, they shall be able to secure to its members all the benefits which such an Association in intended to confer." Weekly premiums ranging from $2 to $8 were accepted and provided for insurance from $2,500 to $10,000. And while the premiums may sound small by today's standards, in 1852 they represented a substantial investment.

To help promote its offering, the company included an impressive list of references including Nathaniel B. Borden of Fall River, and Middleborough residents Major Elisha Tucker, J. W. P. Jenks, Nahum M. Tribou, Ebenezer Pickes, Eleazer Richmond, Dr. John Perkins, and Dr. Franklin Gilman.
Sadly, there is little record of the operation of the company. Following its annual meeting held on April 9, 1853, however, it was reported that "this Company is understood to be on a good foundation for further successful operations." Yet, sometime between this announcement and late summer, the company seems to have mysteriously become defunct. At the prodding of the North Bridgewater [Brockton] Gazette, Middleborough's own Namasket Gazette looked into the affairs of the curiously inactive company in late August. Its conclusions regarding the Old Colony Health Insurance Company were uncompromising:

Like the rest of such companies, this seems to be, at least, inactive. The letters addressed to this company, or its reputed officers, are not taken from the Post Office, but remain dead letters. They had a lot of handbills struck off by us, the early part of the season, and these bills, most of them, except some that were sent to Linus W. Snow of Bridgewater, remain in our office as dead bills. We would have given the North Bridgewater gazette , answer to its enquiries some weeks ago: but we waited to see some signs for the better. They are not apparent and it seems to us that when a Company's Officers disclaim connection with it, it is time to the public knew it.

Nothing is known of the demise of the Old Colony Mutual Health Insurance Company. It is probable that the organization was simply ahead of its time, and that local residents believed that they could ill afford such a modern novelty. Not for another half century or more would modern health insurance become popular locally.
"Deutsches Apotheken-Museum" by William A. Franklin, published under a Creative Commons license. Some rights reserved.
Old Colony Mutual Health Insurance Company advertisement, Old Colony Memorial, October 23, 1852, p. 4
Namasket Gazette, November 4, 1852, p. 4; April 15, 1853, p. 2; "Old Colony Health Insurance Company", September 2, 1853, p. 2.
Old Colony Memorial, October 23, 1852, p. 4.


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