Quote:
Originally Posted by Sagran
Why does no one question the logic of tying access to medical care through insurance to employment? Or why it's become an employer's responsibility assume the costs to provide health care for his employees?
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Question it? Mainly because there's nothing or no one to question. You have to understand how the situation came about to understand why I say that. Originally health care was not expensive....many illnesses weren't even treatable so, conditions that are no problem today, you died from at one time. A lot of hospital care was for recovering from accidents rather than illnesses. Many hospitals were also run by charitable organizations then too (like the Catholic or Baptist church).
To give you an example, my father was in a car accident around 1940. He broke both arms and a leg. The fracture in his leg required him to bed hospitalized for 6 months....it had to be kept in a sling with constant tension on it so that the bone would heal straight (that's the way they did it back then). When it was healed, nno sooner than he tried to stand on it, it broke again. The bill for a 6 month stay in the hospital would be astronomical today but, back then my grandfather just paid for it in cash (and he was by no means wealthy....he was an Italian immigrant that worked for Mack Trucks, hardening transmission gears).
Medical care advanced over time and as science and technology made more illnesses treatable, the cost of care increased rapidly to the point where it had become unaffordable with some serious illnesses and caused many people to file for bankruptcy due to medical bills.
The purpose of any insurance is to provide financial protection from catastrophic losses that would otherwise be unaffordable. There was no such thing as health insurance until the time came where a catastrophic illness was not only survivable but, also unaffordable....which gave insurance companies a new product to market (something consumers would want to protect themselves from financially).
Originally there was no such thing as health maintenance organizations (HMO's) and insurance companies offer health insurance through indemnity policies (what many refer to today as major medical insurance). As health insurance became more and more popular, employers started providing it to employees and their families as a fringe benefit (an incentive for working for them just like vacation pay, sick pay, 401K plans, etc.). At that time health insurance had no mandates on it like it does now and insurance companies were able to offer inexpensive coverage to large groups, like large companies or corporations.
The reason they were able to do this is because at that time (with all things being equal and again no mandates), the most important thing to controlling costs, was having a level of risk that was typical and well diversified so, that the risk could be accurately predicted by actuarials using historical data. In other words not having a bunch of selective risk, like people signing buying coverage only because they found out that they are suddenly ill and will be incurring large medical bills (that's insurance fraud but, at one time it was easy to do and almost impossible for insurance companies to prove). By providing coverage to an entire group of employees, it guaranteed insurance companies that not only were at least the employees in good health (they had to be in reasonably good health in order to be working) but, that no one in the group was intentionally obtaining coverage because they just found out they were seriously ill.....it would be a group of policyholders that had typical (which meant predictable) risk.
Health insurance was never the responsibility of the employer, it just became so common for employers to include it as part of an employees benefit package, that it's expected. As you know Medicare is part of Social Security but, that wasn't always the case. Social Security started in the 1930's with Roosevelt. It wasn't until 1965 (about the time medical care was clearly becoming unaffordable and even more so for the elderly), that Medicare (and Medicaid) were added to the Social Security program.
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