143

What the other answers fail to address is a fundamental flaw in capitalism for certain types of business: Your average human places their continued survival above all other priorities. This concept is called 'inelastic demand'. In order for supply and demand to work properly, both entities need to be free to disengage and seek other options. But when one'...


102

First, let's be clear: employers do not offer benefits like health insurance naturally. If we go back to the early stages of industrialization, employers merely offered salaries (often paltry salaries, at that). Benefits — as the name implies — came into play later; they were meant as incentives to hire and retain engineers, high-level management, or highly ...


99

How free is the US health care market really? The reason that free competition has not made health care in the US cheaper is that free competition has in fact been severely restricted for decades. As described in this article, regulation of the health care industry has been continuously expanded (decreasing the supply of drugs, doctors, etc.), while ...


50

This is a relic of the World War II--the government mandated wage controls so businesses competed on benefits. Health insurance was one of those benefits. Until the ACA the government never made individual policies really viable--what's the point of insurance you will lose in a few years if you develop chronic problems? (I see some people don't understand ...


41

Jeff Lambert has found the Sanders proposal. SEC. 107. PROHIBITION AGAINST DUPLICATING COVERAGE. (a) IN GENERAL.—Beginning on the effective date described in section 106(a), it shall be unlawful for— (1) a private health insurer to sell health insurance coverage that duplicates the benefits provided under this Act; or (2) an employer to provide ...


40

I place the blame on the fees charged by drug makers, doctors, nurses, and hospitals. The market for healthcare does not have the "supply and demand" dynamic. Patients just have to "pay-up". After a cycling accident fractured my clavicle, I didn't call 3 or 4 EMT services for price quotes. Someone else had to dial 911, the EMTs took me away to the ER ...


18

I think you're looking at this the wrong way. Many factors impact prices. Competition doesn't necessarily mean that prices will be lower year-over-year. Competition means that prices will be lower than they would be if there was no competition. If prices went up by 5% but they would have gone up by 8% in a non-competitive environment, then competition ...


17

You really have two separate questions here: Why does the US not have socialized medicine? This has been fairly extensively discussed, on StackExchange and elsewhere, so I see no point in re-hashing those political & philosophical arguments. Why do employers often offer medical insurance as a fringe benefit? This is simpler to answer: because ...


13

Because that's not how insurance works Insurance is about risk management. When private companies enter this arena, their number one goal is to make a profit. They have to figure out how much a person should pay over time, estimate how much they'll have to pay out, and still come out with a profit margin. It's all probabilities. If you're paying $200 a ...


13

To explain the hypothetical "why": mixed public-private healthcare systems are almost always worse than ones which are closer to purely public. Countries which have switched to allow private treatment as another tier to a public system usually see increases in wait times for the public sector, because doctors choose to service wealthy individuals whose ...


13

The U.S. federal government subsidizes healthcare benefits by making them tax-exempt. Firms can therefore offer higher overall compensation by shifting part of that compensation into health benefits. As you've identified, the system where health coverage is tied to employment, caused by this distortionary subsidy, is problematic. As such, economists are ...


12

In my experience, when the affordable care act came out the first year there were quite a few choices in my city so you could shop and compare. By the second year there were fewer choices and then I moved from northern VA to central VA, just 80 miles away and my insurance didn't work anymore and now there were less choices and completely different. What I ...


11

removing the ability of private health insurance companies to compete will give rise to a natural monopoly in the industry, leading to an overall increased cost to the taxpayer. Emphasis mine - and this is where the free-market assumption is utterly wrong. Private health insurance, private hospitals, and private everything has one focus in mind. Return on ...


10

The generic description of universal single payer national health care is as follows: Define what the national health care plan covers Enroll everyone in that national health care plan There are a lot more details that vary among countries, most of them related to how and who pays. From looking at Bernie's campaign I have no idea which specific solution he ...


10

There probably are few actual benefits, but a number of reasons for it: Historical (+1 to Loren's answer) and customary. "This is how we've always done it and we're not like those darn socialists elsewhere". Better the devil you know. Political. Keeps healthcare spending off government books. By letting employers foot up the bill and giving them tax ...


9

Other answers are getting into the nitty-gritty of policy law, but it sounds like you're looking for the basic principles that govern this decision. Separate-but-equal doesn't work. From around 1890 to the 1960's, American life was segregated: Black schools and White schools, Black restaurants and White restaurants, Black banks and White banks. The Courts ...


9

Let me answer the question at the end, which is really simple. How do existing nationalized healthcare systems seek to mitigate this issue? In most countries where healthcare is universal and free-to consumer (i.e. they don't specifically make payments for individual treatments) the funding comes from mandatory contributions, usually levied on employers ...


8

The premiums are there to cover the cost of drugs, hospital prescription drugs, reagents and lab testing compounds, and hospital machinery, mainly. US pharma companies invest a great amount of their funds into stock buyback, purchasing their own shares to satisfy investors and pay corporate exec bonuses. https://www.ineteconomics.org/perspectives/blog/...


8

Maybe I read too fast, but I didn’t see this. After working ten years for a large non-profit health care system, much of that in the financial department, it is my unproven opinion that part of it is because the insurance companies make contracts with doctors to accept certain amounts, and there’s a limit to how low a doctor will go before refusing the ...


7

Because health insurance is intentionally designed to subvert market forces. Competition of the sort that tends to lower prices requires meaningful consumer choices and accurate consumer knowledge. Health insurance subverts choice by coercing consumers into group policies tied to their employment, and restricting which providers the consumer can use and how ...


6

The most logical thing is supply and demand. Healthcare has a high demand due to it being pretty much mandatory due to the consequences of nothing it being disastrous. This is contrary to many other products/services on the market. (there is for example no downside to not going to a movie theater or not buying a new tv) A practical example that I ...


6

The medicare-for-all still needs to be paid for and if you look at European countries with universal healthcare for reference, this will take a significant proportion of wages (for example around 16% of pre tax wage in Germany, paid half and half by employee and employer). So instead of the employer putting money into a health care plan he would have to put ...


6

The way health insurance is payed for by employers creates a massive tax loophole, the employee does not pay tax on the employer portion of their insurance, and the employer can deduct it as an expense rather than pay payroll taxes on it. Switching to Medicare for all is an effective pay cut for anyone with employer provided insurance, because there would ...


5

Americans with health insurance are not so much in love with their coverage, as relieved that they have coverage at all. Inequality is so internalized that the public expects some sectors to have much better outcomes than others. Those with job-linked health insurance relish their superiority over the more disadvantaged people without. The very fact that ...


4

Some parts that has not been mentioned yet. Part of the evil cycle is that the "price" to become a doctor in the US is much higher than elsewhere. Then there is the lack of transparency. You cannot get a price for something like a childbirth. (If you can prove it is coordinated it would be illegal) But I really don't understand why a big employer like ...


4

You don't really need to ban private coverage in a single-payer plan, but you do need to enroll everyone for best results, so what you can't do is to allow opt-outs. The differentiating point regarding to the US is really the need to consolidate the risk pool across the population for economic efficiency. That, and using the state's purchasing power to ...


3

Here is a document from OECD Health Statistic detailing the kinds of private health insurances available in countries where public health insurance is provided. The document defines three kinds of private health insurance: Duplicate where coverage is available for risks also covered by public health insurance. This would allow someone to choose to e.g. have ...


3

While of course there are disadvantages, to note some benefits of employer health insurance: Compared to national public health insurance: Employer health insurance allows for competition among insurance companies and among employers to find ways of delivering more value to attract and retain customers/employees. Most Americans are happy with their current ...


3

The key question is: Why is it cheaper for an employer to buy health insurance for their employees than it is for an individual to buy the same coverage for themselves? There is a fundamental reason for that: Changing health insurance needs to be difficult. Let's imagine that it was easy to change your health insurance. If you are healthy, you will choose ...


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