What most people consider health "insurance"

What most people consider health "insurance" is actually genuine insurance combined with inefficient pre-paid medical care. Contrast that with standard car or homeowners insurance policies. Those plans protect us against unlikely but expensive events, such as a bad car accident or a house fire. But we don't use car insurance to cover routine predictable expenses such as oil changes.The current system of employer-based health "insurance" is an artifact of federal tax rules from World War II. When the U.S. government imposed wartime wage and price controls,alligator shear employers could no longer compete for workers by offering higher salaries. Instead, they competed by offering more generous fringe benefits such as health insurance. In 1943, the IRS ruled that employees did not have to pay taxes on health insurance paid for by employers; in 1954, the IRS made this rule permanent.

This law permanently distorted the health insurance market in favor of employer-based plans. If an employer pays $100 for health insurance with pre-tax dollars, the employee enjoys the full benefit. But if the employer pays that $100 as salary, the worker will only be able to purchase $50-70 of insurance after taxes. The law also created perverse incentives for insurers to shift as many services as possible into pre-tax plans. Gradually, they started covering not just major expenses but minor routine expenses alligator shear such as immunizations and well-baby checks.Think of what would happen to the market for car oil changes if they were offered as a tax-free benefit through your workplace.

Over time, this tax disparity helped employer-based health insurance dominate the private insurance market. Hence, most workers don't own their own health insurance in the same way that they own their auto or homeowners insurance. When workers change jobs, they almost always must also change health plans.Adding to this problem have been the many state and federal regulations mandating specific insurance benefits. At the federal level, ObamaCare requires all plans include a laundry list of "essential health benefits" such as maternity coverage, pediatric dental services,skin analyzer "free" HIV and syphilis testing, and obesity counseling. The states require an additional 2,271 mandatory benefits including acupuncture, in vitro fertilization (MA), and hair prostheses. These mandates inevitably drive up insurance costs.

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