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Comment by throwway120385

3 days ago

It ceased to be a free market when we enshrined employer-provided plans into the law. If it were more like auto insurance where I can fire my insurance company and receive a pro-rated refund or renegotiate coverage in the middle of the year then it would be more free. But my employer negotiates for me on my behalf, and their needs are often at odds with my needs. And the whole "open enrollment" period thing creates a situation where the insurance company gets to be absolutely terrible for an entire year and there's no recourse. And especially there's no recourse if my employer is generally satisfied, because my alternative is to take a massive pay cut to get good coverage.

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throwway120385

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mattgreenrocks  3 days ago

I never understood why health care had to be so tightly coupled to employment. All it does is tie people down, obfuscate costs, and give insurance companies more leverage over everyone, companies and employees alike.

  • johnnyanmac  3 days ago

    Very long history I suggest you look into, because it's very interesting, but the oversimplified explaination:

    after WW2, there was very obviously inflation. It was crazy in the EU and Japan, but the US still experienced some too. To fight this, the government made a then-common tactic of wage controls: basically cap off the maximum amount an employer can compensate workers, in order to fight the inflation spiral.

    But there was an imporant exemption. This was only on wages and not any benefits given to employees in order to try and quell the inevitably angry employees. So when companies couldn't attract talent with more money, they offered more benefits. including employer sponsored healthcare. Perfect since these contributions were free from income tax.

    And the modeled spiraled from there. a tax code passed in 1954 to let these contributions be business expenses, Medicaid came in the 60's, etc. It was great back then, but it was getting more expensive to navigate and companies started compromising to manage it. up to our favorite healthcare starting its vertical integration 20 years ago to come into what we know them for today.

  • nradov  3 days ago

    This is an example of what economists call path dependence. In principle there's no good reason for access to health care to be coupled to employment and we wouldn't design the system that way if we were starting from scratch. Originally it started during WW2 when the federal government imposed wage controls to hold down inflation, so employers took advantage of a legal loophole to offer free employee benefits such as health insurance in order to attract workers. At that time healthcare was pretty cheap because it couldn't really do much. That system stayed after the war ended largely due to inertia. It probably benefits large employers because it gives them a cost advantage over smaller competitors but overall it's a terrible burden on the country.

    A better approach would be to mandate that everyone purchase individual or family policies directly from insurers on open exchanges using pre-tax dollars, with subsidies for low-income consumers.