Temporary Fix, Permanent Cost: Why Health Insurance Is Expensive | Intellections

whether it's a world war or a pandemic authorities are quick to enact policies during a crisis to protect the public from harm these policies are enacted with the best of intentions but they often have long-term unintended consequences that far outlast the crisis for example during world war ii the government instituted wage and price controls to help with the war effort but there was a problem businesses couldn't recruit enough workers without offering higher wages to compensate for these wage controls

employers started paying for their employees health insurance as a new benefit businesses and workers then successfully lobbied congress not to count health insurance's income effectively making it tax-free wage and price controls were lifted after world war ii but the tax-free status of employer paid medical care remained in place today federal taxes are still subsidizing expensive employer-paid insurance these plans give patients less motivation to scrutinize the cost of their healthcare choices so they end up using more care than they

really need ultimately this drives up medical costs and healthcare premiums for all if not for a temporary decision made in the midst of a world war today's healthcare system might offer americans more options and lower prices when a crisis happens we expect our policymakers to respond but we should remember policies that might be good in the short term can have bad long-term consequences

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