What's the point of employer-based health care?

What’s the advantage here?

It’s a perk offered by the employer to retain and recruit better employees.

It’s something for politicians to point to so as to refuse to implement universal health coverage in the United States and celebrate the free market. “Who do you want making your health care decisions, your family or some bureaucrat in Washington?”

The idea is that if you want Healthcare you have to WORK for it. Obviously it hasn’t worked out like it was intended. My own company (except for the suits of course) have gotten rid of raises/bonuses just to keep healthcare costs where they are now.

There’s no real advantage; it pretty much happened this way in the U.S. as a result of accidental historical circumstances which didn’t occur in other countries. That’s the main reason our health care system is so different from anywhere else.
It simply happened here that the first organizations to offer group medical benefits were employers rather than governments.

Now, of course, it’s all bound up in politics of free-market advocates vs. others, but that’s decades after the fact.


Besides what has been mentioned, there is a huge benefit to employees that have real health problems in themselves or their families. Group health policies typically don’t require any health screening so a family that a father with heart problems, a mother with diabetes and a child with cerebral palsy pay the same employee subsidized rates as a perfectly healthy family. The family with lots of health problems wouldn’t be able to find private health insurance at any reasonable rates because the model is different and private insurers are for-profit. That means that working for a company that offers group health insurance is a huge incentive or even a necessity for some people.

Not to mention that those of us with great health insurance through work have no intention of seeing it stripped away to be replaced by some monolithic, government-mandated monstrosity that would be public health insurance.

I think a lot of it comes from the wage freezes during WWII. Employers were, while forbidden to increase wages, facing increased competition for their workers. Providing medical coverage and retirement benefits was a way to keep their employees without breaking the wage controls.

That is a good point as well. Me and my family have endured multiple unfortunate circumstances in recent years where we literally needed the best medical care on planet earth to make it through. Fortunately, we got it because the U.S. does the best medical care available anywhere especially here in the Boston area as long as you have a good medical plan. Our PPO plans treat everything on a “money is no object” basis as long as you go through the proper channels. I have learned over the years how to get levels of care that often boggled my mind. There are a lot of us like this and that is why it is a hard sell to get the majority to compromise the medical care we have come do enjoy for some supposed greater cause.

Yes, that’s the historical accident I was alluding to.


That’s exactly right and when you throw in the tax savings, to corps., of offering fringe benefits to workers, you have the beginning of employer based healt care. Then toss in the irrational Ameican fear of socialism and we are where we are.
Capitolism is a wonderous thing and it’s not going to be undone by a universal, single payer, health care system.
Any advantage in employer based health care, for the general population, has vanished long ago.

It’s part of our social control network. Whether overtly or covertly, our systems are aimed at keeping folks working to make profits for the powerful, just to get basic human rights such as food, shelter, and healthcare. Inherent in this is penalizing those who won’t or can’t work in the system with loss of survival capacity.

So “our system” is unique in that people are expected to work for a living? :confused:

Employers benefit by providing their employees because an employee with access to good health care will take less sick days, and be more productive when they are at work.

There is an entire department where I work that focuses on ergonomics, for example. It is cheaper to buy $1000 office chairs than it is to pay the medical costs when a person develops a bad back from sitting in a crappy chair for ten hours a day.

That’s one way to look at it, another would be, screw you, I’ve got mine.
Are you completely confident that you’ll never be in a position where you have no medical insrance protection?

I think Oregon Sunshine’s point was that we are basically serfs.

I’m wondering if things might have worked out better if health insurance in the US is more typically purchased by the individual directly (just like auto or life insurance) instead of being stuck with the group plan provided by the employer? It seems to me that part of the premise of “letting the market work itself out” is that the consumer must be able to choose among the vendors. Under the current system, there’s very little that an individual can do if they are not happy with their health insurance company other than looking for another job. Insurance company may be more motivated to provide better service if it is easier for the consumer to vote with their feet.

It’s not really a tax savings to the corporation – rather the employees. Whether my corporation pays my $1000 insurance premium or pays me $1000 more in salary they still get to deduct it. But if they pay it to me, I have to pay income and FICA tax on it before I pay my own insurance premium. It is only deductible to me if total medical expenses are about some percentage (7% maybe) of my income and even then it’s subject to the normal phase out of deductions.

Disregard the conspiracy theories here. The only correct answer is the one that mentioned the fact that it arose during WWII as a way to give employees more compensation in a way that wasn’t banned by wage-and-price controls. When the IRS said that employer-sponsored health insurance was tax deductible but individually-purchased insurance was not, it gave the impetus for the growth of employer-sponsored policies over individually-purchased policies. Without this type of government meddling, it is unlikely that health insurance would be any different from car insurance, homeowners insurance, or any other type of insurance that is not dependent on employers.

Or put another way, I should give up not only my health insurance but my wife’s as well on the off chance that someday both of us might need much worse coverage? Nobody will take that deal. Down deep, we are all shallow. I got mine. Yours is your problem.