Heathcare and Employers

[Toastedlightly]

I am trying to become a bit more informed here, but is there any valid reason why employers have become the traditional source of health insurance? Is it merely the large groups of people who are congregated together so negotiate fair prices? I am rather curious as to how this came about and what everyone thinks of this.

This is in light of the healthcare reform bill which did not take the duty of health insurance off the business, but further reinforced the role of the employer as both a source of income and as a source of wellness.

 

[Hacp]

I am trying to become a bit more informed here, but is there any valid reason why employers have become the traditional source of health insurance? Is it merely the large groups of people who are congregated together so negotiate fair prices? I am rather curious as to how this came about and what everyone thinks of this.

This is in light of the healthcare reform bill which did not take the duty of health insurance off the business, but further reinforced the role of the employer as both a source of income and as a source of wellness.

Its because health insurance is not taxed.

 

[nonlnear]

Group discounts are a small part of it, but it's mostly because non-employer based plans are taxed while employer provided ones are not. It is one of the largest and most obviously glaring flaws of the system. It is also one of the easiest to fix, and yet in over two thousand pages of heaven sent sausage guess what? Nothing.

Now if the bill were truly a socialist one I could understand them skipping over that point straight to a statist regime. However given that they chose to stick with the industrial oligopoly model, it's amazing that an oversight as obvious as that got missed. Well, it's amazing if you assume that the bill was designed for the benefit of the citizens and commons sense, but that's just jive talkin'... What they did was construct a much more complicated system of fines and awkward incentives to keep people locked into corporate group plans, so that most individuals will still never truly exercise choice in their insurance. It took a bad system and made it... different.

 

[GroundedSailor]

I am trying to become a bit more informed here, but is there any valid reason why employers have become the traditional source of health insurance? Is it merely the large groups of people who are congregated together so negotiate fair prices? I am rather curious as to how this came about and what everyone thinks of this.

This is in light of the healthcare reform bill which did not take the duty of health insurance off the business, but further reinforced the role of the employer as both a source of income and as a source of wellness.

During and after WW2 there were wage controls in place so employers could not offer more salaries to entice people to work for them. So they started offering perks as an add-on, and the most common perk was employer paid health care. Thats when it became widespread and commonplace.

 

[MovingTarget]

From what I've been told, companies were heavily incentivized during WWII to do this as a way of offering benefits that got around the wage and price controls. The system grew from there as it became further entrenched in our laws and markets. I haven't researched this claim though, so I could be wrong...

 

[Sclamoz]

Health insurance first caught on as I understand around the great depression when a group of nonprofit health insurers called The blues (which evolved into Blue Cross Blue Shield) started providing plans for people. Doctors had started charging people more for there services as they were actually learning how to cure diseases and people were struggling to pay due to the economy.

Once this caught on other insurance companies got involved looking to make a profit. This was amplified by WW2 when the government enacted a wage freeze on workers. To get around that companies started offering health insurance as a benefit.

President Truman proposed a national health plan but because the private insurers were already in place and fear of socialism it didn't go through.

Here is a pretty good timeline on the subject:

http://www.pbs.org/healthcarecrisis/history.htm

 

[Patranus]

From what I've been told, companies were heavily incentivized during WWII to do this as a way of offering benefits that got around the wage and price controls. The system grew from there as it became further entrenched in our laws and markets. I haven't researched this claim though, so I could be wrong...

History bites the "progressive" in the ass again.

 

[ProfJohn]

The WW 2 story is the truth.

It started as hospitalization and has grown from there.

The main problem with healthcare is that the quality of care keeps improving due to beter and more expensive equipment and tests. Healthcare was cheap in the 50s, but you died of a LOT more things than today.

When people complain about the rising cost of healthcare they ignore the improved results that have come along with that cost.

It's like demanding a better car year after year, but refusing to pay a higher cost to go along with that quality improvement.

 

[piasabird]

This came about because the government interfered with the free market and told the private sector that they could not raise employees pay. You have it. It is the fault of the US government tinkering with the economy when they have no idea what they are doing.

 

[Sclamoz]

History bites the "progressive" in the ass again.

This came about because the government interfered with the free market and told the private sector that they could not raise employees pay. You have it. It is the fault of the US government tinkering with the economy when they have no idea what they are doing.

Yeah ending the depression and winning ww2. What were the fools thinking?

 

[nonameo]

The WW 2 story is the truth.

It started as hospitalization and has grown from there.

The main problem with healthcare is that the quality of care keeps improving due to beter and more expensive equipment and tests. Healthcare was cheap in the 50s, but you died of a LOT more things than today.

When people complain about the rising cost of healthcare they ignore the improved results that have come along with that cost.

It's like demanding a better car year after year, but refusing to pay a higher cost to go along with that quality improvement.

The problem is that it's either all or nothing... I can't opt to get 1950's care for 1950's prices. You're either paying 2010 prices for 2010 care or you're !@#$ed. I think I might rather have 1950's care than no care at all(however, I wasn't around in the 50's so I can't really say what it was like...)

 

[Slick5150]

Yeah ending the depression and winning ww2. What were the fools thinking?

I'm sure in his mind the free market would have won WWII on its own somehow..

 

[Patranus]

The problem is that it's either all or nothing... I can't opt to get 1950's care for 1950's prices. You're either paying 2010 prices for 2010 care or you're !@#$ed. I think I might rather have 1950's care than no care at all(however, I wasn't around in the 50's so I can't really say what it was like...)

Sure you can. Walk into a doctors office and pay cash.

 

[ProfJohn]

The problem is that it's either all or nothing... I can't opt to get 1950's care for 1950's prices. You're either paying 2010 prices for 2010 care or you're !@#$ed. I think I might rather have 1950's care than no care at all(however, I wasn't around in the 50's so I can't really say what it was like...)

Actually the problem is that people don't have to pay for their care so they don't watch their costs.

Our system is filled with TONS of wasted procedures used by doctors to inflate bills.

Imagine if instead of paying a flat co-pay we had to pay a percentage of the actual bill. People would be FAR more concerned with the amount of money they spent and the procedures they allowed.

There is a grocery store that implemented something similar and saw their medical expenses drop greatly. AND their employees are actually happier about their healthcare now than they were before because they are far more involved in their treatments.

 

[Special K]

I am trying to become a bit more informed here, but is there any valid reason why employers have become the traditional source of health insurance? Is it merely the large groups of people who are congregated together so negotiate fair prices? I am rather curious as to how this came about and what everyone thinks of this.

This is in light of the healthcare reform bill which did not take the duty of health insurance off the business, but further reinforced the role of the employer as both a source of income and as a source of wellness.

Others have already answered your question, but if you're interested in learning more, here's a good TAL episode that explains a lot of it:

http://www.thisamericanlife.org/radio-archives/episode/391/More-Is-Less

 

[BarkingGhostar]

Group discounts are a small part of it, but it's mostly because non-employer based plans are taxed while employer provided ones are not. It is one of the largest and most obviously glaring flaws of the system. It is also one of the easiest to fix, and yet in over two thousand pages of heaven sent sausage guess what? Nothing.

Now if the bill were truly a socialist one I could understand them skipping over that point straight to a statist regime. However given that they chose to stick with the industrial oligopoly model, it's amazing that an oversight as obvious as that got missed. Well, it's amazing if you assume that the bill was designed for the benefit of the citizens and commons sense, but that's just jive talkin'... What they did was construct a much more complicated system of fines and awkward incentives to keep people locked into corporate group plans, so that most individuals will still never truly exercise choice in their insurance. It took a bad system and made it... different.

The problem is that the costs are not fair to individual employees. I can and have been able to get the same coverages that my employer provides at a better rate than my employer claims it costs them to cover me.

Now, if I demand my government to pass a law that requires my employer to give me $$$ in a tax-free lump sum each year so that I can go get my own healthcare coverage, that employer tune will change immediately and grossly.

The increased costs are those older employees, the retired employees, and those employees with families on the benefits. Folks such as myself are the ones getting screwed.

And now Obama will insure that I get screwed even more.

 

[Linflas]

Actually the problem is that people don't have to pay for their care so they don't watch their costs.

Our system is filled with TONS of wasted procedures used by doctors to inflate bills.

Imagine if instead of paying a flat co-pay we had to pay a percentage of the actual bill. People would be FAR more concerned with the amount of money they spent and the procedures they allowed.

There is a grocery store that implemented something similar and saw their medical expenses drop greatly. AND their employees are actually happier about their healthcare now than they were before because they are far more involved in their treatments.

Please tell me you really don't buy into the Obama hyperbole "'You know what? I make a lot more money if I take this kid's tonsils out"? There may be some very small minority of doctors that do this to inflate the bill but those "wasted procedures" are mainly done to protect doctors and their practices against lawsuits or for legitimate diagnostic reasons. I recently had an MRI, the doctor's only involvement in that procedure was to write me a prescription and receive the results. He received no money directly or indirectly from the MRI, it was done by an organization that he did not refer me and was totally unaffiliated with his practice.