Why is health insurance seen as the employer's responsibility?

Health insurance is traditionally tied to a person’s job. Why isn’t it seen as the individual’s responsibility?

You need to add “in the United States” to the question: the relationship between employment and health insurance is not found in most other countries.

From Wikipedia:

Here’s a pdf that gives a longer-term history.

I have a related question: If the U.S. switched to full single-payer health care, it would seem that there would be a huge wealth transfer as employers were relieved of their contractual health-care obligations. What are the ramifications of that?

Well, from everything I’ve seen the right-wingers say, we’d have tons of new jobs suddenly “created”.

I must admit, I’m a bit curious about that. Would wages increase accordingly, or would the business owners just pocket the difference? I imagine the latter would happen in the short-term, but then wages would increase as employers struggled to attract good employees.

I would suspect, tho, that our (I’m an employer) taxes would go up, perhaps?

They would definitely go up. However, if you are paying for health insurance and your competitors are not, they may go up less than your current premiums, while your competitors would start paying, so you would then have a competitive advantage with regard to them.

It started in WW2 when wages were frozen. Wages were frozen, because there was a labor shortage, because soldiers had been removed from the labor pool, and supplying the war effort needed lots of labor on the home front. A free market would have seen wages rise as a result, but that would have made the war more expensive for the US to fight.

In order to attract skilled workers, employers had to offer non-wage benefits, and health insurance was low hanging fruit at that time. (it didn’t cost a lot for a group plan). Even with wages not frozen after the war, this and similar benefits were highly prized by workers because they were not taxed as income.

It thus became established in the US culture that a “good job” came with health insurance. If you didn’t offer it, you were automatically a second-rate employer.

This is probably the biggest reason we don’t have UHC in the US. As long as most workers had “good jobs” with health coverage, we didn’t need it.

Great post. There was also a more traditional family unit back then–more nuclear families, fewer divorces. You only needed *one *worker with a “good job” in every household, which was usually dad. Mom could stay home full-time with the kids if she wanted, or go out and get part-time work without benefits (as a waitress or secretary or caretaker) without crippling the family’s finances. A single “good job” could provide for the whole family’s needs, back then… try that today! :stuck_out_tongue:

Watched Maddow last night, the wiki explanation was her’s.

I’ve been toying with your related question for a minute or two. One might think that wages would go up, but I don’t think it would. I think wages would stay right where they are and companies would pocket their new savings as profit. That said, I also think that employees, now no longer shackled to crappy McJobs they hate but stay in solely for the health insurance, would be happy to scamper off somewhere else.

Let’s pretend we enact some sweeping, real reform, that involves a single-payer, universal healthcare system, like most first-world countries have already. I, for one, would probably quit my job the next day. :wink: I can piece together a living out of multiple revenue streams doing stuff I like all day instead of sitting in this cubicle putting in time at a job I’m beginning to hate. And would much rather. Right now, I choose the shackles because otherwise, no medical coverage. I’m already one dreaded-disease or one horrible car accident away from financial ruin as it is. But if we had single payer UHC, I could drop my hours/wages doing something I prefer to do because I don’t have to worry about what the hell I’m gonna do if I get sick or gravely injured, or maimed or something.I think that after a while, there would actually be a labor demand because many people like me have been dreaming of starting up businesses or following their bliss however for a long time. Eventually, employers will have to offer something to be considered a “good job” and that will either amount to free gap coverage insurance or higher wages.

Will UHC make it any easier for disabled people to enter the workforce?

We pay a huge amount for health benefits for our employees (over $10,000 per year per employee) If we relieved of that obligation we would definitely pay more, make more profit for the owners, and could still pay more in taxes. As a job creator and small business owner, I cannot understand why the chamber of commerce types aren’t demanding medicare for all.

Highly inappropriate, unfair, shallow, and indefensible political jab, spoiler’d for the benefit of those interested in a civil discussionOnly Republicans consider it the employer’s responsibility. As a cite, I offer the current example of their reaction to the government mandating it be an individual’s responsibility to obtain it through their employer or purchase it himselfMore civil response: The origin of the tradition have already been stated. Currently, it’s a matter of remaining competetive as an employer. If an employer in my field were to eliminate it from the benefits package, they would have to compensate for it some other way, probably with cash. The alternative would be to risk an exodus of their best employees and having the resulting vacuum filled by the trash that was let go by the competition to make room for the sudden glut of quality people.

Funny. I was reading that same Wikipedia article earlier today in regards to one of the other health insurance thread here.

Couple of points made in the article that I think are important in relation to what is going on these days:

Wiki article:
“In the 1930s, The Roosevelt Administration explored possibilities for creating a national health insurance program, while it was designing the Social Security system. But it abandoned the project because the American Medical Association (AMA) fiercely opposed it, along with all forms of health insurance at that time.”


"President Harry S. Truman proposed a system of public health insurance in his November 19, 1945 address. He envisioned a national system that would be open to all Americans, but would remain optional. Participants would pay monthly fees into the plan, which would cover the cost of any and all medical expenses that arose in a time of need. The government would pay for the cost of services rendered by any doctor who chose to join the program. In addition, the insurance plan would give a cash balance to the policy holder to replace wages lost due to illness or injury. The proposal was quite popular with the public, but it was fiercely opposed by the Chamber of Commerce, the American Hospital Association, and the AMA, which denounced it as “socialism.”

Sounds familiar? The point is that twice before US presidents have tried to enact national health care of some sort, and both times failed. Health insurance companies were born from this failure, and it was doctors that lobbied against nationalized health care in the past.

Fast-forward to 2012. Now there are numerous health insurance companies, and they are now a big lobby, sometimes going up against the doctors and hospitals to contain costs. The insurance companies seek to spread risk, and by getting large employer groups on-board, they can do that effectively. Employers spend a lot of money on health insurance and are always seeking ways to cut costs, and put pressure on the insurance companies to help them in that regard. The point is that employers are the biggest consumers of health insurance and they pretty much dictate what options their employees will have, and usually cost is a primary factor in those offerings.

It may not be the bad, evil insurance company telling you what you can and cannot have, it may be your own employer selecting the most cost effective options so they can continue to operate and offer insurance at all.

One important point: group coverage is vital because it’s a mini-“individual mandate”. Insurance companies offer private companies a lower per-person rate because the private company promises that all their employees will have health insurance. This way all the low-risk people are forced to pay in, broadening the risk pool. ETA: “Group” doesn’t have to mean “employer”, but it generally does.

I’m not sure how true it is, but according to Paul Krugman the reason we don’t have UHC in the US is because of race relations. FDR and Truman wanted to institute a nationwide medicare like plan (which I believe would’ve made the US the first wealthy country to have UHC, Britain didn’t get their system until 1948 or so) but they couldn’t get southern democrats to agree to it because they were afraid it would lead to integrated hospitals. Since nationwide UHC couldn’t be passed, instead we got UHC for the poor and the elderly via medicaid and medicare. I believe that was from the conscience of a liberal.

Also a big reason health insurance is tied to employers is that health insurance in groups covers pre-existing conditions. Insurance bought on the individual level does not usually cover pre-existing conditions, assuming you can get it with a pre-existing condition.

I see quite a few group policies, maybe the majority, that do not cover pre-existing conditions.

I meant not initially, eventually they will after the pre-exist period expires

There are 9-18 month periods where pre-existing conditions aren’t covered unless you have been insured for that amount of time already. But with individual insurance you can’t get insurance in the first place with a pre-existing condition a lot of the time.