Jimmy Schultz - Employer Provided Prepaid Health Care

In the 1940s during World War II congress and President Franklin Delano Roosevelt had frozen the wages of American workers. Wages were frozen, however employer provided benefits were not.

So naturally employers saw increasing employee benefits as the only way to lure in employees and eventually prepaid healthcare provided by employers became pretty standard practice.

And if that werent enough to encourage employers to provide this prepaid health care, the government also decided to give these employers a tax break for doing so even though individuals buying health insurance saw no such tax breaks.

Now clearly the wage freeze imposed at that time ended long ago, but the tax breaks to the employers while ignoring the individual, remain still today.

And so companies continue to provide this prepaid care and individuals continue to expect them to do so and have become reliant upon it.

So you may ask, why is this problem?

Well, this is a problem of course because we now have an entire nation of people who dont care how much a doctors visit costs or how much their medicine costs because as far as they can tell, it isnt costing them a thing.

So when we have a cold, instead of shopping around for a doctor one the basis of price and quality of care, we only worry about the latter and let the insurance company worry about the bill.

And after many many years of doing this, we act surprised that the prices go up rather than down as we make technological advancements that in any other sector of the economy would cause prices to go down.

Now quickly I want to point out that Im not talking about emergency care or catastrophic medical needs, Im only talking about your standard everyday illnesses.

So if you really want to fix healthcare, consider step one to be removing the tax incentives for employer provided prepaid health care.

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