Why is US health insurance tied to employment?
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Because the capitalist culture in the United States has very closely tied the value of anyone’s life to employment. If people who don’t work get sick and die or end up in the hospital with crushing debt, culturally we’re ok with that because our national myth has built up the idea that they deserve it.
ETA: Maybe the people downvoting this would like to elaborate on what I’m missing?
During the Great Depression/WW2 era, employers had their wages frozen. They weren’t able to compete on wages anymore so they started offering benefits. Namely in the form of healthcare.
Since we never developed a Universal Healthcare system and Healthcare is a major necessity, it just kinda…stuck.
You actually don’t *need* to get it through an employer and the Affordable Care Act made non-employer insurance much easier.
As a side note, employment is a requirement for “government” health insurance in most countries.
The unemployed and poor in the US are typically eligible for government-run health insurance. Depending on several factors (age, disability, income, etc) it is either free or drastically reduced from what we pay in premiums at work.
Children are most commonly covered by state-level programs which, again, depends on household income. Imagine a single mother with two children making $12/hr. In the state of Kentucky she and both children qualify for free health insurance which waives visit and prescription copays, food stamps/EBT of $550/month and reduced childcare expenses of around $30/child/week. This was what an ex had setup for herself specifically.
Income goes up to $15/hr and lose childcare assistance (which for two school age children easily exceeds $600/mo), food stamps decrease to $150/mo and insurance cost become $30/mo iirc. That’s where government benefits in the US kicks a person in the nuts: there’s no real sliding scale so you feel like you’re making progress. People don’t understand the true flaws until they’ve dealt with the bureaucracy.
Technically it’s not, anyone can buy health insurance and you don’t need to be employed to get it.
The catch is Health Insurance premiums in the US are very expensive. Offering Health Insurance to your employees helps share the cost and gets the cost of premiums down significantly. Arguably to the point where they are actually affordable by the common man.
Offering benefits to your employees helps offset lower wages and helps with attracting higher quality workers and with retention.
The sole purpose for anything in the US to exist, other than true non-profits, are to make as much money as humanely possible. That’s how they can make the most. Keep the masses working for this thing you might only need once or might need once a week
Insurance companies’ business model, for any type of risk, is to work out what it will cost to pay out for the average person’s incurred costs and then charge them that amount plus a profit margin.
However, there’s a problem here – some people may realise the risk for them is lower than the risk for the average person. In the context of health insurance that would be younger, healthier people – they figure they don’t need the insurance because the risk to them is lower.
And they’re right, but this upsets the calculations if they don’t get insured. Insurance companies want to insure those young healthy people as they’re more profitable.
So, one way companies historically dealt with this was to sell insurance to employers. If the employer has a big population of people and no opt out then they get a nice diverse population of insured people including (cheap) young healthy people which spreads the risk.
Edit: not sure why this is being downvoted. Medical insurance being tied to employment is not a uniquely American thing. I am not American. I am an accountant. This is one of the key reasons it happens and will have been historically why insurance companies prefer to insure companies over individuals.
If anyone wants to let me know why they dislike what I’m posting please let me know!
Rule 2.
Better to r/askanamerican about r/healthinsurance.
It’s not necessarily. Your employer offers to subsidize or pay it in full as a perk/benefit of working for them. You can get insurance directly yourself as well.
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