How We Got Here: A timeline of tax-free health care


1960s – Employer-driven health coverage begins

As is the case today, in the 1960s, health care benefits were paid for by employers. But, in the latter part of the decade, rising inflation caused a spike in the price of health benefits and employers started to look for ways to reduce their costs. They ultimately found an answer in two ways: the first was through introducing many of the features of modern health insurance plans like deductibles and coinsurance, which exist so employees remain responsible for a portion of their own health care costs and offset the burden to the employer.

The second way was to scale back on the benefits the plans offered which reduced coverage and the quality of employee health plans inevitably suffered. These leaner health plans had smaller physician networks, as well as less coverage for medical specialists and specific treatments.

Without the same level of comprehensive coverage to rely on, some employees were forced to go out of their physician networks to get the care they required. And they had to pay for their health care costs out of their own pockets, with money they had already been taxed.

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