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As an interested non-American, how would that change the system?

IanDrake 13y ago
In the US, if your employer pays for your health insurance, they pay for it with pre-tax dollars. If you buy it, you buy with post tax dollars. That's why employers pay for it in lieu of paying you more. If your employer pays for your car insurance as a benefit, they pay for it with post tax dollars, so they don't do that. So, employers pay the premium on your health care for the tax advantage. Now consider the how psychology behind not being the one who pays for the premium. Do you care how much your services cost? No. Do you care if the premium goes up? No. Do you shop around for better insurance? No. Do you care if you loose your job if you're sick? Hell yes. In effect all normal market pressures are gone. No one who consumes resources cares about their costs because they're are completely disconnected from paying them or some derivative of them. This is why doctors don't post prices. While the net effect for people with employer provided health insurance is ever increasing rates, the effect on those people without health insurance is brutal. They are trying to enter a market that has no price pressure.
- lewispollard 13y ago
  So essentially the market for health insurance is competitive on what companies can afford rather than individuals? So the proposed change would force insurance companies to be more competitive on a smaller scale and in the long run, cheaper. Interesting.
aestra 13y ago
Health insurance is weird in the US. In World War II we had wage controls which kept wages tight. When the War Labor Board declared that fringe benefits, such as sick leave and health insurance, did not count as wages for the purpose of wage controls, employers responded with significantly increased offers of fringe benefits, especially health care coverage, to attract workers. As a result it became the defacto standard to get your insurance through your employer and your employer picks a company and group plan that spreads the risks over everyone and pays most or all of the premiums with before tax dollars. Employees can usually pick from a few plans (individual or family, maybe two levels of coverage) For example, my employer pays 2/3rds of my premiums and I pay 1/3rd. They would rather give me health insurance than money for my own health insurance because they don't have to pay taxes on the health insurance premiums they pay for me. Nobody gets a choice in what your employer picks as a health insurance. If I wanted my own insurance of my choice I would have to opt out my that extra money my employer kicks into my health insurance (I would lose it, I couldn't apply it to my own plan, and it is a substantial amount of money)

In the US, if your employer pays for your health insurance, they pay for it with pre-tax dollars. If you buy it, you buy with post tax dollars. That's why employers pay for it in lieu of paying you more. If your employer pays for your car insurance as a benefit, they pay for it with post tax dollars, so they don't do that. So, employers pay the premium on your health care for the tax advantage. Now consider the how psychology behind not being the one who pays for the premium. Do you care how much your services cost? No. Do you care if the premium goes up? No. Do you shop around for better insurance? No. Do you care if you loose your job if you're sick? Hell yes. In effect all normal market pressures are gone. No one who consumes resources cares about their costs because they're are completely disconnected from paying them or some derivative of them. This is why doctors don't post prices. While the net effect for people with employer provided health insurance is ever increasing rates, the effect on those people without health insurance is brutal. They are trying to enter a market that has no price pressure.

lewispollard 13y ago
So essentially the market for health insurance is competitive on what companies can afford rather than individuals? So the proposed change would force insurance companies to be more competitive on a smaller scale and in the long run, cheaper. Interesting.

aestra 13y ago

Health insurance is weird in the US. In World War II we had wage controls which kept wages tight. When the War Labor Board declared that fringe benefits, such as sick leave and health insurance, did not count as wages for the purpose of wage controls, employers responded with significantly increased offers of fringe benefits, especially health care coverage, to attract workers. As a result it became the defacto standard to get your insurance through your employer and your employer picks a company and group plan that spreads the risks over everyone and pays most or all of the premiums with before tax dollars. Employees can usually pick from a few plans (individual or family, maybe two levels of coverage) For example, my employer pays 2/3rds of my premiums and I pay 1/3rd. They would rather give me health insurance than money for my own health insurance because they don't have to pay taxes on the health insurance premiums they pay for me. Nobody gets a choice in what your employer picks as a health insurance. If I wanted my own insurance of my choice I would have to opt out my that extra money my employer kicks into my health insurance (I would lose it, I couldn't apply it to my own plan, and it is a substantial amount of money)