This is Part 5 in BrokeCon by Design, a series on how American systems are rigged against regular people. Part 1: USA! USA! USA! | Part 2: The Words That Stop You From Thinking | Part 3: Follow the Money | Part 4: The Healthcare Trap: What Congress Gets vs. What You Get
Imagine your grocery store access was tied to your job. Quit and the food stops until you find a new employer — and if the new employer’s network doesn’t carry the things you actually eat, well, hope you like what’s in aisle four.
That’s how American healthcare works. We’re the only developed country that does it this way, and we didn’t design it on purpose. The government froze wages during World War II to prevent inflation, so in 1943 employers started offering health benefits to lure workers — benefits weren’t wages, so they bypassed the freeze. In 1954 the tax code made employer-paid insurance deductible for companies and tax-free for workers, and the temporary workaround calcified into the central organizing principle of American healthcare. Eighty years later, every other developed country looks at this arrangement with something between bewilderment and horror.
It hasn’t been unwound because large employers like it, insurance companies like it, pharmaceutical companies like it, and both political parties take money from all three. This piece is about what that system does to you in a normal week. Part 6 is about what to do about it.
How the Leash Works
Pick a worker with a kid who has Type 1 diabetes. Insulin, pump supplies, CGM sensors, glucagon — figure $1,200 to $1,500 a month at retail without insurance. The current employer plan covers all of it for a $50 copay. A better job opens up across town: $15,000 more a year, real career upside. But the new plan has a 90-day waiting period, and nobody can tell them in writing whether the new insurance covers the same insulin brand, what the pharmacy network looks like, or what the deductible resets to in January.
So they stay. That’s not a voluntary employment relationship. That’s the leash Part 4 described, working exactly the way it’s designed to. And the same dynamic shows up across the labor market in three quieter forms.
Job lock is the term economists use for what happens when you can’t quit because of insurance. The phenomenon has been studied for thirty years and is one of the most replicated findings in labor economics. Brigitte Madrian’s foundational 1994 work found that employer-tied insurance reduced job mobility by roughly 25%; later studies using different datasets put the effect somewhere between 25% and 40% depending on population and method. Survey work by the Commonwealth Fund and EBRI has consistently found that roughly one in four insured workers reports staying in a job they’d otherwise leave because of health coverage. Apply that to the 155 million Americans with employer-sponsored insurance and you’re looking at job lock affecting somewhere between 30 and 50 million workers in any given year.
Wage suppression is more subtle and probably costs you more. The 2025 KFF Employer Health Benefits Survey put the average family premium at $26,993, with the worker contributing $6,850 and the employer paying the other $20,143. Single coverage averaged $9,325 in premiums and an $1,886 deductible. That $20,143 the employer pays on your behalf comes out of the same pool as your wages — it’s compensation, just compensation you never see and can’t negotiate against. Family premiums have risen 6% or more for three years running, the worst stretch in two decades, while wages have grown 4%. When your boss says they can’t afford raises this year, they’re not mentioning the $20,000+ they’re already spending in your name, or the fact that it’s growing faster than your paycheck.
Entrepreneurship lock is the wonky term for the third thing. If you want to start a business, you add $25,000 to $30,000 a year in individual-market family coverage to your startup costs before you’ve sold a thing. The literature on this is consistent: Fairlie, Kapur and Gates (2011) found employer-tied insurance significantly reduces business formation; Olds (2016) found Medicare-eligibility-style insurance access raises self-employment for older workers by 14%; Blume-Kohout (2024) found ACA-driven insurance access raised self-employment among adults with pre-existing conditions by 1.4 to 1.8 percentage points before political attacks on the exchanges eroded the effect. The exact magnitude varies. The direction never does. A meaningful number of small businesses that would exist if healthcare wasn’t job-tied simply never get started here.
What the System Actually Does With the Money
Worth pausing on what’s happening with the $20,143 your employer routes through an insurance company on your behalf.
The seven largest publicly traded health insurers reported a combined $71.3 billion in profit in 2024, the highest year on record. Their CEOs took home a combined $146 million in compensation. UnitedHealth Group alone cleared $23 billion in profit. Since the ACA passed in 2010, more than $9 trillion in revenue has flowed to the country’s largest health insurers. Direct written premium across the U.S. health insurance industry ran $682 billion in the first half of 2025 alone — roughly $1.4 trillion annualized.
That money buys you, on average, a 20% chance your claim gets denied. KFF’s analysis of 2024 ACA marketplace data found insurers denied 19% of in-network claims and 37% of out-of-network claims, for a combined denial rate of 20% — with individual insurers running as high as 36%. Of denied claims, fewer than 1% are appealed; of the appeals that do happen, insurers uphold their own denial about two-thirds of the time. The most common reason listed for denial is “Other” (36%) followed by “administrative reasons” (25%). Only 5% of denials cite a lack of medical necessity. The other 95% are paperwork.
Roughly 17% of every premium dollar at private insurers goes to administrative overhead and profit. The comparable figure for traditional Medicare is around 2%. The Center for American Progress, working from National Academy of Medicine data, estimates that billing and insurance-related administrative costs total close to $500 billion a year in the U.S. system — money that pays no doctor, treats no patient, and exists primarily because we routed healthcare through employers and insurance companies instead of providing it directly.
And the people paying premiums are, increasingly, going without care anyway. The most recent KFF Health Tracking Poll (May 2025) found that 44% of U.S. adults say it’s difficult to afford their healthcare, 36% say they’ve skipped or postponed care in the past year because of cost, and 18% say their health got worse as a result of skipping it. Gallup-West Health’s 2025 data put the number of Americans who borrowed money to pay for healthcare in the prior year at 31 million, with an aggregate of $74 billion borrowed. About one-third of Americans, roughly 82 million people, say they’ve cut back on food, housing, or utilities in order to afford medical care.
You are paying record premiums into an industry making record profits to receive care you increasingly can’t actually use.
The Other Country In The Room
The United States is the only developed country that ties healthcare to employment. Not “one of the few.” The only one. Canada, the UK, France, Germany, Japan, Australia, the Netherlands, Switzerland — they implement universal coverage differently among themselves, some single-payer, some heavily regulated private markets, plenty of variations in between. None of them route your ability to see a doctor through your boss.
They’re all still capitalist economies. Private property, free markets, billionaires, stock markets, all the usual furniture. They’ve just collectively decided that decoupling healthcare from employment isn’t socialism, it’s not exotic, and it’s not optional if you want a functioning labor market. Per OECD data, their administrative costs run a fraction of ours — about 2.7% of total health expenditures in Canada, 4.8% in Germany, 3.9% in the Netherlands, 1.6% in Japan, against roughly 8% in the U.S. (and that OECD figure for the U.S. excludes provider-side billing overhead, which roughly doubles the real number). They spend about half what we do per capita and get better outcomes on basically every metric that matters — higher life expectancy, lower infant mortality, no medical bankruptcies.
When health ministers from peer countries describe the American system in interviews, the recurring word is “cruel.”
Why It Hasn’t Changed
The obvious question: if every other comparable country figured this out, why haven’t we?
In 2024, the health sector spent $743.9 million on federal lobbying — more than any other industry, for the eighth year in a row. PhRMA alone spent $31 million. America’s Health Insurance Plans spent $11.8 million. UnitedHealth Group spent $3.7 million in a single quarter of 2025, more than double what it spent in the same quarter the year before. The insurance industry as a whole spent over $130 million through the first three quarters of 2025 and is on pace to clear $170 million for the year. Add hospital systems, pharmaceutical companies, PBMs, and trade associations and the annual spend protecting the status quo is north of $1 billion.
The money flows to both parties, which is the whole point. It doesn’t need to buy specific votes. It buys access, kills bills in committee, and ensures that whatever reform survives to a floor vote has been preemptively softened until it doesn’t threaten the underlying revenue streams. So neither party seriously pushes to unhook healthcare from employment. They tinker around the edges. They expand subsidies. They argue about the ACA marketplaces. The part where your boss controls your access to medical care stays exactly where it is, because the part where your boss controls your access to medical care is worth, conservatively, more than a trillion dollars a year to the people who built it.
Modern Serfdom
The title of this piece is “Modern Serfdom” because functionally that’s what employer-tied insurance is. You can’t easily leave your employer. You can’t easily negotiate against them. You can’t easily start something on your own. Your medical care, and your family’s, depends on staying in their good graces. The word “serfdom” sounds dramatic until you sit with what it actually means: your access to a doctor is conditioned on continuing to work for a specific person. The medieval version of this arrangement came with worse dentistry and better folk music, but the structure is the same.
Every time someone proposes decoupling the two, you’ll hear the same word as if it settles the argument: socialism. Canada isn’t socialist. Germany isn’t socialist. Switzerland — which runs the most market-driven universal system in the developed world — is definitely not socialist. The word is doing a different job. It’s there to make you flinch before you finish the thought, because the people who profit from your inability to leave your job have spent decades and billions of dollars training you to flinch on cue.
The real question isn’t whether universal coverage is socialist. It’s whether being trapped in a job you hate so a profit-making company can deny one in five of the claims you submit, while its CEO takes home $26 million a year, is the kind of “freedom” you actually want.
What other countries do, what would actually work here, and why you’re told it can’t — that’s Part 6.
Sources
Premium, contribution, and deductible figures: KFF 2025 Employer Health Benefits Survey. Job lock: Madrian (1994, QJE); Gruber & Madrian (2004) review; Commonwealth Fund and EBRI tracking surveys. Entrepreneurship lock: Fairlie, Kapur & Gates (2011); Olds (2016); Blume-Kohout (2024, ILR Review). Insurance industry financials: KFF Health Insurer Financial Performance 2024; NAIC 2025 mid-year health insurance industry analysis; corporate 10-K filings. Claim denial rates: KFF, “Claims Denials and Appeals in ACA Marketplace Plans in 2024.” Cost-related care avoidance: KFF Health Tracking Poll (May 2025); West Health-Gallup Healthcare Surveys (2024-2025); Peterson-KFF Health System Tracker (NHIS 2024). Administrative costs: OECD Health Statistics; National Academy of Medicine via Center for American Progress; CMS Medicare Trustees Report. Lobbying: OpenSecrets, 2024 annual and 2025 Q1–Q3 reports.
Even that's Odd 
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