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The reason is the $265 billion tax break given to employers for providing health insurance. During WW2, there were wage controls, but employers needed to attra

The reason is the $265 billion tax break given to employers for providing health insurance. During WW2, there were wage controls, but employers needed to attract workers, so Congress gave them this small (at the time) tax break for providing health insurance to workers. (They don't have to pay payroll taxes on that portion of compensation.) Who doesn't want to encourage employers to provide perks to their employees, especially perks that improve their health? But this has blossomed into a huge market imbalance, where people can't change jobs due to insurance concerns, and buying individual insurance puts you at a huge financial disadvantage compared to employer-provided insurance.

jpwagner 17y ago
I totally agree with you, but you skipped over the "WHY". Why did it "blossom"? Why did it not get corrected after WW2? Especially when (forgive my lack of data) I'm sure public data could corroborate that the average time spent in one position/job has decreased steadily since then.
- Xichekolas 17y ago
  > Why did it "blossom"? Because health care costs skyrocketed, which led to skyrocketing insurance premiums. Something that was previously 1-2% of compensation is now often >10%. > Why did it not get corrected after WW2? It's a rare thing for Congress to pass a bill that reduces complexity... just look at the tax system. This bill is a case in point. There were numerous way to reduce complexity (and hence costs), but instead they just added more. More complexity isn't always bad, but it's very rarely cheaper. Ways to reduce complexity: remove the market distorting tax break, regulate insurance at a national instead of state-by-state level, make insurance compulsory, make health insurance actually act like other insurance. (You don't expect your car insurance to pay for oil changes or your homeowner's insurance to pay for smoke detector batteries do you? And in that vein, when was the last time you lost your car insurance because you lost your job?)
- aaronblohowiak 17y ago
  Rarely does the government shrink entitlement programs
  - jpwagner 17y ago
    while true, it's a pretty despicable answer
ericd 17y ago
Source? The Undercover Economist?
- Xichekolas 17y ago
  My original source was an Economist article about health care from last summer, but it seems to be behind a paywall now. The Washington Post covers it here: http://voices.washingtonpost.com/ezra-klein/2009/05/health_reform_for_beginners_th.html http://voices.washingtonpost.com/ezra-klein/2009/05/health_r...

jpwagner 17y ago

I totally agree with you, but you skipped over the "WHY". Why did it "blossom"? Why did it not get corrected after WW2? Especially when (forgive my lack of data) I'm sure public data could corroborate that the average time spent in one position/job has decreased steadily since then.

Xichekolas 17y ago
> Why did it "blossom"? Because health care costs skyrocketed, which led to skyrocketing insurance premiums. Something that was previously 1-2% of compensation is now often >10%. > Why did it not get corrected after WW2? It's a rare thing for Congress to pass a bill that reduces complexity... just look at the tax system. This bill is a case in point. There were numerous way to reduce complexity (and hence costs), but instead they just added more. More complexity isn't always bad, but it's very rarely cheaper. Ways to reduce complexity: remove the market distorting tax break, regulate insurance at a national instead of state-by-state level, make insurance compulsory, make health insurance actually act like other insurance. (You don't expect your car insurance to pay for oil changes or your homeowner's insurance to pay for smoke detector batteries do you? And in that vein, when was the last time you lost your car insurance because you lost your job?)
aaronblohowiak 17y ago
Rarely does the government shrink entitlement programs
- jpwagner 17y ago
  while true, it's a pretty despicable answer

ericd 17y ago

Source? The Undercover Economist?

Xichekolas 17y ago
My original source was an Economist article about health care from last summer, but it seems to be behind a paywall now. The Washington Post covers it here: http://voices.washingtonpost.com/ezra-klein/2009/05/health_reform_for_beginners_th.html http://voices.washingtonpost.com/ezra-klein/2009/05/health_r...