Dear Editor,
"Employer-based health insurance is out of date," by Ken Reynolds points out one of the problems with employer-based health insurance.

An elderly man must continue to work to retain health insurance for he and his wife. Ken says it is out of date. I am not sure when it was ever a good idea. After all, it causes many other problems. When people change jobs, they must change health insurance. To save money, many employers are opting for managed care where the insurance company controls the choices.

Ken says, "Much has changed since the inception of the employer-based system." Such an interesting thought. When did it start and why?

Actually, it started during World War II. At the time, the Federal Government in its wisdom to advance the War effort decided that with the labor shortage, wages were too high. They fixed this with a law to freeze wages. This caused a problem. People were staying in their old jobs but the war industry needed workers. This government caused problem now needs fixing.

They fixed it when the war industry, with the blessing of the Federal Government, gave workers health insurance instead of wages.  This lured workers to the gun makers. After the war, the Federal Government ended the wage freeze but extended the idea of workers getting health care instead of wages to all industries. The dirty little secret is that this part of their pay comes tax free. When workers get health care, there is no income or FICA taxes withheld for this form of compensation.

The practice persists to this day. For the last 20 years, politicians have worked endlessly to try and fix the problem they caused in the first place.

One solution is to give tax breaks to all health care but the government hates to lose tax revenue. Another solution is to tax employer-based health care. This is political suicide. A final solution that I prefer is to replace the income tax with the FairTax. If this happened, I expect that people would wonder what ever happened to the old job-based medical care system of the past.

Thanks,
Bert Loftman, MD