I've been crusading for individual health insurance and ranting against employer-based coverage for years, because privately-owned coverage is exactly what America needs to put the kibosh on skyrocketing premiums, lack of portability, consumer ignorance (regarding medical costs) and the over-consumption (abuse!) of healthcare services.
Health insurance should never have been linked to employment in the first place.
We don't expect employers to provide us with auto, homeowner's or life insurance, do we? So how did we get into this mess? Federal wage and price controls during World War II prevented employers from raising employee salaries...
but not from increasing their "fringe" benefits.
So companies started offering Health Insurance as a way to "sweeten the pie" in order to compete for employees.
Plus, employers were allowed to write-off the premiums...
and employees did NOT have to report their healthcare benefits as taxable income! A very sweet pie, indeed! The IRS resisted...
but with millions of Americans now getting their health benefits tax-free through work...
Congress eventually decided to permanently put the tax exempt-status of employer health insurance into law, and by the mid-1960s, employer-based health benefits were almost universal.
This is a classic example of how, according to Milton Friedman, one bad government policy leads to another.
With health benefits now tax-free (if employer-based), more and more Americans were signing up through work...
and as income tax rates increased, so did the incentive to keep expanding health benefits.
Americans who wouldn't think of using auto insurance to cover stuff like oil changes, tune-ups or gasoline...
were beginning to get used to the concept of using health insurance to cover annual physicals, prescriptions and other low-cost, administrative intensive, routine expenses...
contributing to a mucked-up healthcare system in which virtually every medical bill, regardless of how insignificant, is covered by a third party.
And with someone else picking up the tab, everybody got used to going to the emergency room for a sore throat, running to the doctor for the sniffles, buying brand-name vs.
generic, and dangerously over-medicating, in general.
Is this beginning to NOT make sense to you? When patients think that someone else is paying the bill (employees are really trading potentially higher wages for increasingly meaningless health benefits), they feel very little pressure to shop around and learn what those costs actually are...
and providers feel very little pressure to compete with each other on price.
As a result, prices keep rising, which causes health insurance to be more expensive, which causes people to become more worried about losing their insurance...
and more dependent on the benefits provided by their employers! Is there a way out of this living hell? Yeah, sure, and it's got nothing to do higher taxes, more government spending, a weakened national defense or (gulp) SOCIALIZED medicine.
The key to reforming healthcare in the United States is "de-linking" health insurance from employment and fixing the tax code by taking the tax deduction away from employers and giving employees a refundable health insurance tax CREDIT...
as a powerful and compelling incentive to buy their own private, portable, safer and more affordable health coverage.
As tens of millions of Americans begin focusing more on the true cost of insurance and medical services, price competition will kick in...
and by liberating employers from the mounting anxiety and financial burden of being in the health insurance "business"...
they will be in a position to pay their employees higher wages!
Health insurance should never have been linked to employment in the first place.
We don't expect employers to provide us with auto, homeowner's or life insurance, do we? So how did we get into this mess? Federal wage and price controls during World War II prevented employers from raising employee salaries...
but not from increasing their "fringe" benefits.
So companies started offering Health Insurance as a way to "sweeten the pie" in order to compete for employees.
Plus, employers were allowed to write-off the premiums...
and employees did NOT have to report their healthcare benefits as taxable income! A very sweet pie, indeed! The IRS resisted...
but with millions of Americans now getting their health benefits tax-free through work...
Congress eventually decided to permanently put the tax exempt-status of employer health insurance into law, and by the mid-1960s, employer-based health benefits were almost universal.
This is a classic example of how, according to Milton Friedman, one bad government policy leads to another.
With health benefits now tax-free (if employer-based), more and more Americans were signing up through work...
and as income tax rates increased, so did the incentive to keep expanding health benefits.
Americans who wouldn't think of using auto insurance to cover stuff like oil changes, tune-ups or gasoline...
were beginning to get used to the concept of using health insurance to cover annual physicals, prescriptions and other low-cost, administrative intensive, routine expenses...
contributing to a mucked-up healthcare system in which virtually every medical bill, regardless of how insignificant, is covered by a third party.
And with someone else picking up the tab, everybody got used to going to the emergency room for a sore throat, running to the doctor for the sniffles, buying brand-name vs.
generic, and dangerously over-medicating, in general.
Is this beginning to NOT make sense to you? When patients think that someone else is paying the bill (employees are really trading potentially higher wages for increasingly meaningless health benefits), they feel very little pressure to shop around and learn what those costs actually are...
and providers feel very little pressure to compete with each other on price.
As a result, prices keep rising, which causes health insurance to be more expensive, which causes people to become more worried about losing their insurance...
and more dependent on the benefits provided by their employers! Is there a way out of this living hell? Yeah, sure, and it's got nothing to do higher taxes, more government spending, a weakened national defense or (gulp) SOCIALIZED medicine.
The key to reforming healthcare in the United States is "de-linking" health insurance from employment and fixing the tax code by taking the tax deduction away from employers and giving employees a refundable health insurance tax CREDIT...
as a powerful and compelling incentive to buy their own private, portable, safer and more affordable health coverage.
As tens of millions of Americans begin focusing more on the true cost of insurance and medical services, price competition will kick in...
and by liberating employers from the mounting anxiety and financial burden of being in the health insurance "business"...
they will be in a position to pay their employees higher wages!