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Tue Oct 22, 2013, 05:16 PM

WWII wage and price controls helped establish employer based insurance.

Interesting read and history ~ pinto



Workers pack bullets into machine gun belts in 1942. Factories like the one these women worked for used fringe benefits, including health insurance plans, to lure new employees in response to increased demand for goods during World War II.



Accidents Of History Created U.S. Health System

<snip>

The Modern System Is Born

Soon, Blue Cross coverage was available in almost every state, though not many people bought in. The modern system of getting benefits through a job required another catalyst: World War II. Thomasson says that if the Great Depression inadvertently inspired the spread of employer-based health insurance, World War II accidentally spread the idea everywhere.

"The war economy is an entirely different ballgame," Thomasson says. The government rationed goods even as factories ramped up production and needed to attract workers. Factory owners needed a way to lure employees. She explains that the owners turned to fringe benefits, offering more and more generous health plans.

The next big step in the evolution of health care was also an accident. In 1943, the Internal Revenue Service ruled that employer-based health care should be tax free. A second law, in 1954, made the tax advantages even more attractive.

Thomasson cites the huge impact of those measures on plan participation. "You start from 9 percent of the population in 1940 to 63 percent in 1953," she says. "Everybody starts getting in on it. It just grows by gangbusters. By the 1960s, 70 percent is covered by some kind of private, voluntary health insurance plan."

http://www.npr.org/templates/story/story.php?storyId=114045132

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Reply WWII wage and price controls helped establish employer based insurance. (Original post)
pinto Oct 2013 OP
former9thward Oct 2013 #1
pinto Oct 2013 #2
ConcernedCanuk Oct 2013 #4
DireStrike Oct 2013 #3
RainDog Oct 2013 #5

Response to pinto (Original post)

Tue Oct 22, 2013, 05:55 PM

1. That is certainly how it happened.

But not a good thing. Insurance should not be tied to employment. People remain in jobs they don't want to be in because of insurance.

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Response to former9thward (Reply #1)

Tue Oct 22, 2013, 06:12 PM

2. Yeah, I get that. Posted for the historical aspect.

I think it pays to look at how things developed. At the time it was an innovative incentive to attract employees. And an option to a better wage offer (benefit being the offer) since wages were under controls. Technically employer paid health insurance wasn't a wage "increase". They got around the wage controls and many employees benefited from the ploy.

As you note, it became a lock in for many. The ACA addresses that in it's awkward, early roll out. Insurance is transportable.

Social Security was limited at the outset, expanded and more comprehensive over time. Medicare, as well. I think the ACA will have a similar history.

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Response to former9thward (Reply #1)

Tue Oct 22, 2013, 11:01 PM

4. " Insurance should not be tied to employment " - exactly how we have it here

 

.
.
.

We here are covered from birth - employed or not.

Every legally employed person contributes a small portion of their paycheck to our Health Care funding.

No work, no premiums - still covered for Health Care.

We do have private insurance companies where you can buy extra coverage like cosmetic dental,

private hospital rooms with tv and so on, but basic necessary medical attention . . ?

EVERY legal citizen is entitled to it.

Dis be our Canada.

I'm stayin'

CC

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Response to pinto (Original post)

Tue Oct 22, 2013, 07:49 PM

3. Thanks for the insightful article.

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Response to pinto (Original post)

Wed Oct 23, 2013, 01:04 AM

5. interesting n/t

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