…where a pickpocket takes money out of your wallet, and with it buys you a glass of chardonnay. Although you would have preferred a pinot noir, you decide not to look that gift horse in the mouth and thank the stranger profusely for the kindness, assuming he paid for it.

Most economists believe that employer‐​based health insurance is an analogue of this bar scene.”

—Uwe Reinhardt

A doctor placing an apple into the hands of a patient.
A hand holding a US health insurance card (Individual PPO Plan).
A collage of newspapers circa 1900.

How did employer-sponsored health insurance dominate the U.S. market?

U.S Congress. - Counting The Electoral Vote, Washington DC, 1913.
A Treasury Department official, surrounded by packages of newly minted currency, counts and wraps dollar bills.
Two female factory workers reconditioning used spark plugs at Buick Plant July 1942.
A couple looking worried as they plan their finances at a desk.
Figure 6 [earthquake]: Employee health benefits are the largest source of compulsory health spending in the United States, 2022
Figure 10.2 [earthquake]: Government compels U.S. residents to spend a larger share of GDP on health care than other OECD nations, 2020
Figure 7 [earthquake]: Employers controlled more job-based health insurance and increasing amounts of employees' earnings from 1999 to 2021
Figure 10 [earthquake]: Employer-sponsored health insurance is crowding out cash wages

The tax exclusion distorts the economy and discriminates against the vulnerable.

…low-wage workers and others without employer coverage by penalizing them with higher taxes.



…women, obese workers, older workers, and others with above-average medical needs by increasing medical prices and denying them control of more of their earnings than other workers.



…workers with expensive medical conditions by stripping them of their health insurance when free markets would have provided them continuous, secure coverage.



Figure 12 [earthquake]: Probability of uninsurance after one year of continuous coverage, by type of coverage, 2000–2004

…the financial sector by diverting $1.3 trillion annually away from workers to employers and insurance companies—preventing savings institutions from competing to manage those funds.



…labor markets by diverting compensation away from cash wages to health benefits; obscuring total compensation; and trapping workers in bad jobs.



…the health sector by penalizing continuous, life‐​long health insurance, leaving millions with uninsurable preexisting conditions, and increasing prices for medical care and health insurance.



Female hand holding a fistful of U.S. currency.