Mind Blowing - WWII wage freeze didn't create our healthcare mess? See what Harvard & NBER uncovered...

Marcella Alsan, Yousra Neberai, and Xingyou Ye published NBER Working Paper No. 32484 in May 2024, which examines the rise of USA health insurance. It challenges the long-held assumption (held by many, including current Harvard alum) that health insurance was borne out of government-mandated wage freezes. The paper reveals never-before published involvement of the American Medical Association (AMA) which financed a campaign against National Health Insurance. The AMA Campaign had two key components: (1) physician outreach to patients and civic organizations; and (2) mass advertising that tied private insurance to “freedom” and “the American way.” The study reveals a one standard deviation increase in Campaign exposure explains about 20% of the increase in private health insurance enrollment and a similar decline in public opinion support for legislation enacting National Health Insurance. It also exposes suggestive evidence that the Campaign altered the narrative for how legislators and pollsters described health insurance. In the same way "global warming" was changed to "climate change" these findings suggest the rise of non-single-payor national health insurance was not solely due to wartime wage freezes, collective bargaining, or favorable tax treatment. Rather, it was also enabled by an interest group-financed Campaign that used ideology to influence the behavior and views of ordinary citizens.

Were wage-freezes a part of how we got here? Yes, but not to the extent once thought. And is the tax-deductible status of employer-based health insurance premiums truly the "cocaine" to which American employers are addicted? Yes, but the study may explain why employers continue to reduce wage-increases in order to fund increased health insurance, even though the "Cadillac Tax" (that would've brought an end to this employer/employee write-offs) was repealed. It's a story that has not ever been told on this level, or with this amount of evidence. So as employers ask themselves, "Why am I still in the health insurance game, when the ACA guarantees no-underwriting coverage for all?" this may provide clues to the answer. I spent a decade trying to educate brokers and employers how to responsibly make the health insurance transition they already made in the retirement world - from Defined Benefit to Defined Contribution. They all asked "why?" Was my answer wrong...or at least built on a faulty foundation?