History lesson time: This wasn’t done on purpose. It’s an artifact of decisions made by Congress during World War II to support war production.
So many young men were away at war that it created a labor shortage, even with some women entering the work force. This led to spiraling increases in wages that were threatening the viability of critical war manufacturers.
In an effort to protect this manufacturing sector, Congress capped wage increases. But those corporations were still competing for workers and now they were no longer able to offer them higher and higher wages. So instead, they started offering them “perks” like health insurance, pensions, and paid time off.
THEN:
“In 1943 the War Labor Board, which had one year earlier introduced wage and price controls, ruled that contributions to insurance and pension funds did not count as wages. In a war economy with labor shortages, employer contributions for employee health benefits became a means of maneuvering around wage controls.”
Emphasis mine. And guess what? When those young men returned from war and re-entered the work force, they wanted those perks too. So which company was going to be the first to deescalate the arms race and NOT offer health insurance?
And those perks being so ubiquitous meant the government never had an incentive to provide health coverage directly to anyone of working age, so we only have Medicare for retirees.
And the the employer requirement and massive expansion of GMOs were added under Nixon. He and his contemporaries could have pushed for national health care but of course they didn’t.
Had to look it up myself. I think it refers to Group Member Organizations, which would be the health insurance providers.
When you really think about it, health insurance companies are a bizarre sort of consumers’ union. Your insurance company negotiates prices with providers on your (and their own) behalf leveraging their buying power based on the size of the group. That was probably a good thing at one time, but now the system is so completely broken that if you try to get the same procedure done without insurance, it’ll cost you double or triple what it would cost the insurance company.
Insurance is a bit of a scam. It’s sold as this rosy little co-op, where everyone contributes to a pot of money, then if someone suffers hardship they can withdraw from the pot to cover the cost. This falls apart when you have a 3rd party who manages the pot, determines how much people pay in and if and how much can be paid out, and also derives their income from the pot, at a rate they set themselves. This is an inherent conflict of interest, and makes insurance much more like casino gambling than what they advertise. Just like casino gambling, the house always wins, at the customers’ expense.
100% agree. Insurance companies make money by denying claims. If that isn’t a conflict of interest, I don’t know what is. There is literally a company with financial incentive to deny you the care you need. But specifically with health care, it should be illegal for anyone other than a board certified doctor to deny a claim. People who aren’t doctors have no place deciding whether a physician prescribed therapy is “medically relevant or necessary”.
Big insurance companies have way too much power. They can put immense amounts of pressure on both sides. Hospitals, doctors, and other care providers have to play by the insurance companies’ rules, or they could risk losing their “preferred provider” or in-network status which means they lose a huge number of patients.
Meanwhile, plan participants also have to play by insurance companies’ rules. It isn’t economically feasible to go without health insurance. Hospitals raise prices so that when the insurance company negotiates, the huge cuts they take are less burdensome. But that makes the provider’s listed price for visits and procedures astronomical.
So if you can’t get insurance through an employer, what can you do? What if you’re self employed or an independent contractor? It is often not feasible to buy coverage on your own because it is so expensive. If you do buy solo coverage, your plan is often much worse than a group plan. All more barriers to people getting the care they need.
And you also can’t discount the role Unions played in the American healthcare system. Because not only can you get healthcare through your employer, if you’re in a union you can get coverage through your union. And there was a time when unions had their own doctors on payroll.
During the Great Depression, FDR considered making national health insurance part of his signature New Deal legislation — which would have made the US a pioneer — but those provisions were nixed to prioritize the Social Security retirement and disability programs, among others.
So old people chose something that benefits themselves only over something that benefits everyone.
I mean, penicillin wasn’t publicly available until 1941. So at that time, we barely had healthcare that was even worth paying for. I can understand why they deprioritized it.
I think people forget we’ve had truly modern healthcare for less than a century
History lesson time: This wasn’t done on purpose. It’s an artifact of decisions made by Congress during World War II to support war production.
So many young men were away at war that it created a labor shortage, even with some women entering the work force. This led to spiraling increases in wages that were threatening the viability of critical war manufacturers.
In an effort to protect this manufacturing sector, Congress capped wage increases. But those corporations were still competing for workers and now they were no longer able to offer them higher and higher wages. So instead, they started offering them “perks” like health insurance, pensions, and paid time off.
THEN:
“In 1943 the War Labor Board, which had one year earlier introduced wage and price controls, ruled that contributions to insurance and pension funds did not count as wages. In a war economy with labor shortages, employer contributions for employee health benefits became a means of maneuvering around wage controls.”
Emphasis mine. And guess what? When those young men returned from war and re-entered the work force, they wanted those perks too. So which company was going to be the first to deescalate the arms race and NOT offer health insurance?
And those perks being so ubiquitous meant the government never had an incentive to provide health coverage directly to anyone of working age, so we only have Medicare for retirees.
https://www.ncbi.nlm.nih.gov/books/NBK235989/#:~:text=In 1943 the War Labor,of maneuvering around wage controls.
And the the employer requirement and massive expansion of GMOs were added under Nixon. He and his contemporaries could have pushed for national health care but of course they didn’t.
Sorry, what does GMO mean in this context?
Had to look it up myself. I think it refers to Group Member Organizations, which would be the health insurance providers.
When you really think about it, health insurance companies are a bizarre sort of consumers’ union. Your insurance company negotiates prices with providers on your (and their own) behalf leveraging their buying power based on the size of the group. That was probably a good thing at one time, but now the system is so completely broken that if you try to get the same procedure done without insurance, it’ll cost you double or triple what it would cost the insurance company.
Insurance is a bit of a scam. It’s sold as this rosy little co-op, where everyone contributes to a pot of money, then if someone suffers hardship they can withdraw from the pot to cover the cost. This falls apart when you have a 3rd party who manages the pot, determines how much people pay in and if and how much can be paid out, and also derives their income from the pot, at a rate they set themselves. This is an inherent conflict of interest, and makes insurance much more like casino gambling than what they advertise. Just like casino gambling, the house always wins, at the customers’ expense.
100% agree. Insurance companies make money by denying claims. If that isn’t a conflict of interest, I don’t know what is. There is literally a company with financial incentive to deny you the care you need. But specifically with health care, it should be illegal for anyone other than a board certified doctor to deny a claim. People who aren’t doctors have no place deciding whether a physician prescribed therapy is “medically relevant or necessary”.
Big insurance companies have way too much power. They can put immense amounts of pressure on both sides. Hospitals, doctors, and other care providers have to play by the insurance companies’ rules, or they could risk losing their “preferred provider” or in-network status which means they lose a huge number of patients.
Meanwhile, plan participants also have to play by insurance companies’ rules. It isn’t economically feasible to go without health insurance. Hospitals raise prices so that when the insurance company negotiates, the huge cuts they take are less burdensome. But that makes the provider’s listed price for visits and procedures astronomical.
So if you can’t get insurance through an employer, what can you do? What if you’re self employed or an independent contractor? It is often not feasible to buy coverage on your own because it is so expensive. If you do buy solo coverage, your plan is often much worse than a group plan. All more barriers to people getting the care they need.
The system is broken.
I typed horribly wrong, HMOs. However, the other person’s explanation seems to work well too.
Naturally.
And you also can’t discount the role Unions played in the American healthcare system. Because not only can you get healthcare through your employer, if you’re in a union you can get coverage through your union. And there was a time when unions had their own doctors on payroll.
You forgot this part, before WW2:
So old people chose something that benefits themselves only over something that benefits everyone.
I mean, penicillin wasn’t publicly available until 1941. So at that time, we barely had healthcare that was even worth paying for. I can understand why they deprioritized it.
I think people forget we’ve had truly modern healthcare for less than a century
Nice recap. Thanks.