Many legislators, business owners, and employees have waved the white flag in regards to understanding and solving problems surrounding the accessibility and cost of group health insurance. For the last decade, it seems that the issue of employer-offered health benefits has been discussed, argued over, and budgeted for to the exclusion of all else.
One of the top questions asked when discussing group health insurance is, “What’s going to happen next with the Affordable Care Act?”
Unfortunately, that is a complex question that contains too many variables for anyone to be able to easily answer.
However, to view the issues we are experiencing as new or isolated and directly resulting from our current political climate would be shortsighted. It may be beneficial to review the evolution of health insurance plans in order to gain some perspective on how quickly (or slowly) things can change.
In 1910, Montgomery Ward & Co. entered into one of the earliest group insurance contracts. This triggered the establishment of physician service and industrial health plans. Although definitely not a standard in our society, they were available.
By 1920, 16 states attempted to develop laws aimed at requiring health insurance programs. Think about that for a moment – 100 years ago, the first government-mandated health plans were introduced. However, all 16 efforts failed.
Fast forward to 1943 when the War Labor Board ruled to freeze wages. The wage freeze did not apply to fringe benefits, however, which prompted the business culture seen in today’s society of using benefits to recruit and retain top talent. If an employer was prohibited from paying more in wages during a severe labor shortage, offering health insurance was a great opportunity to sweeten the pot for prospective employees. Employer-provided health insurance started to become a standard benefit for employees. It became a considerable part of employment planning and decision-making. And consequently, it developed into an expectation and eventually, a nation-wide mandate.
Over the next 60 years, the structure of how health insurance was administered remained largely unchanged; Employers contract with insurance companies to manage their risk and provide a network of medical providers at a cost below retail. Likewise, the government has kept up a steady stream of regulations to contribute to the rising cost of care and administration of health insurance.