The Politics of Employment-Based Insurance in the United States

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Abstract
Analyses of the corporatization of U.S. health care typically focus on the political struggle between corporations and traditional health care providers, e.g., physicians. A neglected area of study is the struggle between corporations and their employees over the employment-based health insurance system. Yet, since this system is currently the primary mechanism for financing health care in the United States, an analysis of its historical development is critical to any understanding of the corporatization of U.S. health care. It is argued here that the employment-based health insurance system was a part of a political compromise between capital and labor that emerged after World War II. In exchange for control over production and increased worker productivity, corporations agreed to provide workers with steady wage increases and an expanded system of fringe benefits, or “corporate welfare.” But, by the late 1970s, rising health care costs created a corporate health care financing crisis that has prompted corporations to cut back employee health insurance coverage. The relative inability of workers to resist such cutbacks reveals the extent to which, by linking health care to wage labor, the “corporate welfare” system has made the U.S. working class more vulnerable to corporate power.

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