Why is healthcare provided by your employer in the US?

Why is it normal for work to sponsor healthcare in the US anyway?

It’s strange when you think about it. The flaws are obvious. 

Sick people make lousy workers. 

So why would we attach access to healthcare to the ability to work?

It all started in World War II. 

The worker shortage led to aggressive poaching and wage inflation. 

Wage inflation can lead to regular inflation, so in 1943 FDR imposed a wage freeze.

No longer able to Zuckerberg the talent away from their competitors, employers had to find another way to sweeten the deal. But what could be as valuable to workers as money?

😀☝️💡 What if the company offered to pay employees' medical bills?

Back then, the doctor was still a dude who came to your house, and may or may not have known what he was doing. You paid him in cash... or chickens, or bales of hay, or whatever. 

Private hospitals were more like spas and charity hospitals were only for the very sick. People didn't stay in hospitals very often except on "special occasions." It was too expensive. 

But the unions had started trying this thing where they would insure their members’ health like an asset. They would pool their risk to drive down the cost of insurance.

😀☝️💡 What if, instead of inflating wages with cash, the company offered to pay for something even more valuable than cash? The health of workers and their families. 

Not only would they retain their workers, they might actually be more productive if they and their families could afford to see a doctor when they were sick or injured. 

The IRS, figuring that access to healthcare was probably a good thing, decided that employer-paid health benefits weren’t taxable income. 

And thus, the giant money-laundering scam that is the US healthcare system was born. 

And it all went perfectly after that, there was no corruption, and everyone lived happily ever after. The end.

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👋 My name is Claire. I usually spend the holiday season listening to people’s healthcare horror stories and helping them choose the health plan that’s least likely to make them go bankrupt. And I can do the same for you and your team.

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