Something I didn’t know but often wondered about: Why did the U.S. chart a much different course on health care than most other industrial nations? Why, specifically, do we have a bloated private insurance sector, extremely high medical costs, so many without insurance, and serious problems of coverage for those who do?
Writing for the New York Times, Cornell economist Robert Frank observes that we need to go back to WWII to find the answer. In both the preparation for and prosecution of the war the federal government froze wages and prices. Since there was such a great need for factory workers to produce war materiel, and given the freeze on wages, how could firms acquire sufficient labor? While the government would not allow wage competition it said nothing about benefits. Enter health insurance. Frank:
The United States probably would have adopted one of those models had it not been for historical accidents that led to widespread adoption of employer-provided plans in the 1940s. To control costs of World War II mobilization, regulators capped growth of private-sector wages, making it hard for employers to hire desperately needed workers.
But because many fringe benefits weren’t capped, employers spied a loophole: they could offer additional benefits, like health insurance. Its cost was deductible as a business expense, and in 1943 the Internal Revenue Service ruled that its value was not taxable as employee income. By 1953, employer health plans covered 63 percent of workers, versus only 9 percent in 1940.
Today, of course, the whole issue of health care has become a political football, heavily tarnished by irresponsible propaganda (is there any other kind?). Universal health insurance is socialist! Well, that’s an old epithet, used successfully by the American Medical Association when Harry Truman proposed a Canadian style of government-guaranteed health insurance. Americans, as a rule, become apoplectic at the mere mention of socialism, without bothering to ask why other, perfectly respectable countries, have viable and, in some cases, dominant socialist political parties.
Our level of discourse sucks, because we choose to be willfully ignorant and pathologically myopic. We yell and scream at one another, playing cynical games as if nothing serious were at stake.
Meanwhile, millions suffer unnecessarily in service to “freedom.”