How We Got the Worst Health Care System Mountains of Money Can Buy

[marmar]

via AlterNet:



How We Got the Worst Health Care System Mountains of Money Can Buy

By Jeremy Brecher and Tim Costello and Brendan Smith, TruthOut.org. Posted December 16, 2008.

Many of the problems with American health care grow out of our history of employer-based insurance.



As Americans respond to President-elect Barack Obama's call for town hall meetings on reform of the American health care system, an understanding of how that system came to be the way it is can be crucial for figuring out how to fix it. The American health care system is unique because, for most of us, it is tied to our jobs rather than to our government. For many Americans, the system seems natural, but few know that it originated not as a well-thought-out plan to provide for Americans' health, but as a way to circumvent a quirk in wartime wage regulations that had nothing to do with health.

As far back as the 1920s, a few big employers had offered health insurance plans to some of their workers. But only a few: By 1935, only about 2 million people were covered by private health insurance, and on the eve of World War II, there were only 48 job-based health plans in the entire country.

The rise of unions in the 1930s and 1940s led to the first great expansion of health care for Americans. But ironically, it did not produce a national plan providing health care to all, like those in virtually all other developed countries. Instead, the special conditions of World War II produced the system of job-based health benefits we know today.

In 1942, the United States set up a National War Labor Board. It had the power to set a cap on all wage increases. But it let employers circumvent the cap by offering "fringe benefits" -- notably, health insurance. The fringe benefits created a huge tax subsidy; they were treated as tax-deductible expenses for corporations, but not as taxable income for workers.

The result was revolutionary. Companies and unions quickly negotiated new health insurance plans. Some were run by Blue Cross, Blue Shield and private insurance companies. Others were "Taft-Hartley funds," run jointly by management and unions. By 1950, half of all companies with fewer than 250 workers and two-thirds of all companies with more than 250 workers offered health insurance of one kind or another. By 1965, nearly three-quarters of the population was covered by some kind of private health insurance. .......(more)

The complete piece is at: http://www.alternet.org/healthwellness/113112/how_we_got_the_worst_health_care_system_mountains_of_money_can_buy/

[rpannier]

1. Interesting story...Thanks for sharing nt

[annabanana]

2. This is good stuff to know as we go into battle for a sane

comprehensive solution to the HORRIBLE mash of a health care "system" that we are struggling with today.

[liberal N proud]

3. The original concept in 1942 made sense

But then GREED took over.

[MannyGoldstein]

4. The AMA Developed The Phrase "Socalized Medicine"

They hired a PR firm to protect them when Kennedy was looking into universal health care. The phrase worked well, because everyone was a foe of socialism.

Most people aren't aware that, for many years, the AMA was one of the largest lobbyists in DC. They are, essentially, a trade union that does a great job of protecting their members.