Introduction
Employer-sponsored health insurance has a long history in the United States and remains the main form of individuals’ access to medical services in the country. The coverage of employees’ healthcare expenses by businesses influences economic and social factors and is associated with multiple benefits, including a drastically increased rate of people with insurance since the beginning of the 20th century.
However, with rising healthcare costs, job-based health coverage is less efficient nowadays than it was before because employers tend to expand employees’ financial contributions to insurance. The significance of employer-sponsored insurance in the United States will be discussed in this essay along with the reasons it has emerged in the first place and its impacts on present-day healthcare.
Employer-sponsored
The development of the job-based health coverage can be traced back to the World War II period. According to Carroll (2017), when the war began, many employable individuals were recruited in the military and, as a result, a significant labor shortage took place. To address the issue, businesses were ready to increase salaries to be more attractive to potential employees and remain competitive.
Nevertheless, such a strategy could induce inflation and have detrimental effects on the overall economy and, therefore, was prohibited by the government. Due to this, as Carroll (2017) observes, businesses chose another way and started to compete with each other by offering various benefits to workers. As a result, US employees became able to get very generous health coverage through their jobs.
The employer-sponsored health coverage was substantially supported by the government as well. For instance, “in 1943, the Internal Revenue Service decided that employer-based health insurance should be exempt from taxation” (Carroll, 2017, para. 8). Therefore, job-based insurance became the cheapest way to obtain quality healthcare. It is worth noticing that while in 1940 only 9 percent of US citizens had health coverage, by 1960, over two-thirds of Americans had it (Carroll, 2017). Based on these findings, it is valid to say that this form of health insurance was beneficial in terms of better access to medical services in general.
However, this type of insurance has some disadvantages as well. Firstly, individuals become highly dependent on their jobs and maybe afraid to change employment even when dissatisfied with the work they do because such a change increases the risk of losing access to healthcare. Additionally, Blumenthal (2017) states that employer-sponsored health coverage currently provides less protection than it initially did, and many contemporary employees remain underinsured. The main reason for this is a drastic increase in healthcare costs, which is incomparable with modest increases in workers’ wages (Blumenthal, 2017).
Thus, while businesses strive to save on various costs and generate more profits, they tend to shrink their health insurance plans. It is clear that for middle-class workers and their families it becomes harder to receive quality medical services without employers’ assistance. Such a state of affairs induces a major public concern and indicates that some substantial changes in the health insurance system are required.
Conclusion
Overall, it is possible to conclude that the development of a job-based health coverage system was an inevitable result of political, economic, and social influences shaping the life of American citizens and businesses in the middle of the past century. It is not a perfect form of insurance as it increases individuals’ dependence on employment. Moreover, it is still very expensive and makes people spend large amounts on healthcare. Nevertheless, since no effective and problem-free solutions currently exist in the health insurance market, it is likely that a job-based system will continue to be the preferred insurance form in the United States.
References
Blumenthal, D. (2017). The decline of employer-sponsored health insurance. The Commonwealth Fund. Web.
Carroll, A. E. (2017). The real reason the U.S. has employer-sponsored health insurance. The New York Times. Web.