Why The United States Is The Only Developed Country With An Employer Based Health Insurance

Health care insurance in the U.S. is extremely competitive and not always fair. Recently in 2012, The Affordable Care Act passed by Barack Obama set new regulations regarding insurance. According to this Act, employers of 50+ employees must offer health insurance, public health insurance such as Medicare and Medicaid was made affordable for those that qualify, it is illegal for anyone to be denied insurance due to pre-existing conditions, and everyone must have health insurance or they will endure tax penalties. For Medicare and Medicaid, each state has different qualifications regarding eligibility. Private health insurance is not mandatory, but many of those that can afford it prefer it because it will cover more than any government insurance. Private health insurance also offers family plans along with single plans(varying from company to company), which will definitely attract middle to high income families. Health insurance is an absolute essential in the U.S. as it is up to the citizen to obtain one that works for them.

Health insurance comes as second nature to many of us. We grab that blue and white card and put it in our wallet and forget about it until we are sick or injured. When this happens, there it is, cushioning our fall like the extra padding it provided to cushion our wallets. This is not the case with everyone, however. Many Americans have no cushion to fall back on, no blue and white card to show the emergency room when they have an unexpected health concern. No HMO with a convenient co-pay amount when their son or daughter develops an ear infection.

Prior to this shift, government involvement in health insurance services was minimal since it seemed to be under control by the non-profit sector. There didn’t seem to be an urgent need to control or universalize health care at the time. The government’s first interest in the health care industry sparked when employers began providing health care benefits as a competitive advantage for recruiting workers back into the workforce during World War II. To help cope with the rising unemployment rates, the government would offer tax incentives to employers providing these benefits. (add Quote)

In 1954, Congress passed legislation allowing employers to provide health insurance benefits to employees on a tax-free basis (Sih and Singh 99). This legal provision marked the beginning of the rapidly expanding health care costs still apparent today due to the major incentives provided by the government to obtain employer-based health coverage. The overwhelming popularity of employer-based health insurance has led to a serious market inefficiency resulting from the system of third-party payment. As individuals rely on their insurance companies to pay for their medical expenses, this provides

Long time ago, there was no need for health insurance in America, as doctors had many clients because their services were not so expensive and in some cases in rural areas, people could pay by giving other items. Doctors were not as knowledgeable as they are nowadays to care for the sick, therefore this didn't have much effect then on the patients, as they were treated for the basic illnesses.

The Great Depression in the 1930’s had been followed by a period of growing income inequality and a shrinking middle class. Due to the economic conditions, Income disparities in access to health care had grown much worse, medical costs were rising, and sickness became a leading cause of poverty. Since few people could afford to pay for medical care welfare agencies began to help pay for medical costs for the poor. By “1940, the population of the united states was 132 million with only 12 million – a little less than 10 percent covered by some form of health insurance”( Scofea, 1994). The growing concern of the increase in the number of people who are uninsured led to the enactment of the Stabilization act in 1942, which imposed wage and price controls but at the same time permitted the adoption of employee insurance plans. The federal government enacted this legislation to prevent employers from raising wages in order to compete for scarce labor in response to the inflation pressure of the wartime economy. Furthermore, the government provided private insurers with a new market for their products by permitting employers to offer health insurance to their employees. In the years that followed, the government passed several regulations that helped reinforced the institutionalization of the employment-based system of health insurance that

Before the Affordable Care Act, 50.7 million Americans (16.7 percent) were uninsured. The main reason for this was money. The majority of these uninsured American families simply couldn’t afford health insurance and those who did have insurance spent a good chunk of their income to pay for it. The percentage of Americans who were covered by employment-based health insurance (the most popular form of insurance at the time) was the lowest it had been since 1987 when the first statistics on

Since the 21 century there has been nearly 50 million uninsured Americans and as of today the number continues to increase. This has made medical care to projectile. Change has been needed and incompletely answered these last past few years. It a while before this country to get employer mandate of the affordable care act (ACA). Social security was developed in the 1930's with the anticipation of universal healthcare. Then in the 1940's companies started to offer health care packages to their employees as an incentive to get them to work for their company. During the 1950 strong labor unions recuperated and started to accommodate an amplification of health care of health care coverage. Then in the 1990's Clinton administration started to try

In the beginning of the late nineteenth and early twentieth century, the “healthcare system” was left in the hands of the states, which the states handed off to private and voluntary programs to deal with. In the presidential term of Teddy Roosevelt, 1901-1909, he felt that “no country could be strong whose people were sick and poor.” (Palmer 1999) He did however back health insurance as a whole. Roosevelt was not the one fighting for the health care though, there were outside forces that impacted health care. The American Association of Labor Legislation (AALL) led the campaign for health insurance. They drafted their first bill by 1915. This bill wanted to limit the coverage toward the working class and anyone who earned less than $1,200 a year including dependents. The American Medical Association (AMA) backed this bill because they felt the same way about coverage. The AMA did not speak for all doctors and those who opposed this backing spoke up. The American Federation of Labor (AFL) opposed the bill because they felt that it would weaken the unions and they wanted to maintain their strength. The private insurance

The World War 2 era of wage freezes eventually allowed tax-free fringe benefits such as health insurance. Thus, companies were encouraged through tax benefits to provide their employees with health insurance, resulting in many workers today receiving health insurance from their employers. However, economists believe this policy benefits the rich and drives up healthcare costs. By examining the healthcare system and its costs, economists observed that healthcare took up a larger chunk of the US economy than that of other developed nations. Consequently, the implementation of the Cadillac tax on overly generous health plans was meant to keep healthcare costs under control by discouraging nonessential care and encourage preventative care.

Many large employers offering benefits started to raise costs. They did this to control spending while shifting the cost to the employee. Then employers started offering discounts for those who stopped smoking, lead a healthier lifestyle, and got annual physicals.

In 1943, employer-based health care became tax-free by the Internal Revenue Service. By 1960s, around 70 percent of the public was covered by private or voluntary health insurance plan. In 2010, The U.S. Congress marked the greatest change in our health policy since the 1960s. This is when Congress enacted the Patient Protection and Affordable Care Act. This law was intended to address the fundamental problems of the health care system.

Healthcare didn’t always exist in the United States. Before the 1920’s, most people didn’t have health coverage. Most people were treated at home and hardly anyone, except a few large employers offered healthcare. Everyone else paid out of pocket. As the population shifted from rural areas to urban centers, families lived in smaller homes with less room to care for sick family members (Faulkner 1960, p. 509). Increasing requirements for licensing and accreditation, in addition to a rising demand for medical care, eventually led to rising costs. By the end of 1920s, there was an increased demand for medical care and the costs of medical care increased.

Overall, the role of health insurance as a financial channel will be mentioned. Monetary business objectives will be contrasted with the altruistic goals of health care as a humanitarian service. The benefits of shifting health care management altogether to the government will be discussed, emphasizing its positive effects on the businesses of the employers and the performances of the employees in the United States.

The US constitution doesn 't guarantee healthcare of its citizens nonetheless, most of its dictates implies brotherhood, love and equity. The free market economy that the health care in the United State is provided is a major challenge, mostly because people instinctively think healthcare is an essential service and would be guaranteed in a rich and developed country like the US. However, Health care is a commodity in the US which means it will be affected by forces of the market just like automotive industries for example. So each provider in the industry has to figure out a way to balance demand and supply, pay employees, fight competition, market their products and services appropriately, merge and acquire possible facilities with the aim of making profit amongst other things. Likewise, the buyer has to search for healthcare package that best fits his needs. The apparent advantage of having options has been lost in the fragmented, multi-layered and often confusing nature of the health system.