Essential Aspects Of The American Healthcare System

2932 Words Feb 13th, 2016 12 Pages
1. Summarize the essential aspects of the American healthcare system, highlighting how American health care has evolved since World War Two (eg., who has health insurance, how expensive is health care, what citizen-patient outcomes/life expectancy look like, etc.).
If you want to understand why we are the only developed country with an employer-based health insurance — really, the only one — then you had better get familiar with the Internal Revenue Code of 1954.
The 1954 code is the document in which the federal government codified into law that companies can provide health insurance benefits to workers tax-free. This affirmed a 1943 IRS Tax Court ruling that had also decreed health benefits to be nontaxable.
The early decisions were made in the context of a wartime tax code. There were overwhelming taxes meant to stop wartime profiteering and keep unions from shutting down production to extract wage gains. But when health care was protected from these taxes, it immediately became incredibly valuable to workers, and companies were able to keep it tax-free even after the war. The result is that a dollar in health benefits is worth more to a worker than a dollar in wages because the dollar in health benefits is untaxed and the dollar in wages is taxed.
"That 's a huge discount off the price of health insurance," says Melissa Thomasson, an economist at Miami University who has written extensively on the history of health insurance. "And it happened very quietly. I looked…
Open Document