How the American Healthcare System Got That Way

by Tim Costello, Jeremy Brecher and Brendan Smith

As Americans respond to President-elect Obama call for town hall meetings on reform the American health care system, an understanding of how that system came to be the way it is can be crucial for figuring out how to fix it.

The American health care system is unique because for most of us it is tied to our jobs rather than to our government. For many Americans the system seems natural, but few know that it originated, not as a well thought out plan to provide for Americans' health, but as a way to circumvent a quirk in wartime wage regulations that had nothing to do with health.

As far back as the 1920s, a few big employers had offered health insurance plans to some of their workers. But only a few: By 1935, only about two million people were covered by private health insurance, and on the eve of World War II there were only 48 job-based health plans in the entire country.