An Examination of the Rising Costs of Employer-Sponsored Health Insurance in the United States: What Has Caused This Increase and What Can Be Done to Remedy the Problem?

Employers provide the most common source of health insurance coverage among the nonelderly population in the United States. Health care costs have a direct correlation to the cost of employer-sponsored health insurance. National health expenses jumped from five percent of gross domestic product (GDP) in 1960 to 18 percent in 2011. As costs have risen, so have employer insurance premiums; these increases typically trickle down to employees in the form of lowered wages, decreased hours and increased co-payments and deductibles. Employers and the health insurance companies that work for them are at the forefront of the battle to deal with the problems of the costs and quality of health care in the United States. This paper discusses the history of employer-sponsored health insurance in the United States since its inception in the eighteenth century through today, including the effects of government reform and the Patient Protection and Affordable Care Act (PPACA) on the nation’s private insurance system. I investigate universal health care as it affects private, employer-based health care costs. I also propose changes to combat continued increases