The Evolution Of Employer-Sponsored Insurance

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A couple stories Friday examine just how Americans ended up with a system where employers pick up the tab for health insurance and which groups will end up paying more for health reform.

NPR on the history of the employer-based system: "The evolution of the American health care system began in the 1920s, when choices boiled down to which crazy cure you preferred." Potions were the norm where health care for a year cost the equivalent of today's $100. But advances in medicine created the need for health insurance as costs rose. "By the late 1920s, hospitals noticed most of their beds were going empty every night. They wanted to get people who weren't deathly ill to start coming in." So insurance was created that allowed people to pay a little bit every month to pay for health care. World War II and tax-free incentives on health care from employers added to the explosion in care (Blumberg and Davidson, 10/22).

BusinessWeek reports on the future -- if health reforms are enacted -- and that insurers and taxpayers will likely foot the bill for the system's changes, and that doctors will feel the least pain. "It's safe to say doctors will give up the least, pharmaceutical and medical device makers will fall somewhere in the middle, and insurers will be the big losers." Consumers will foot the bill if they have too generous a plan - called "Cadillac" plans - while pharmaceutical companies, medical device makers and insurers will also lose (Sasseen and Arnst, 10/22).

This information was reprinted from kaiserhealthnews.org with kind permission from the Henry J. Kaiser Family Foundation. You can view the entire Kaiser Daily Health Policy Report, search the archives and sign up for email delivery at kaiserhealthnews.org.

© Henry J. Kaiser Family Foundation. All rights reserved.