Let's all agree that Rush Limbaugh is a vagrant little sac of pus (okay, one of those words is a lie). Still the question remains--why do we pay an insurance company to cover routine medical expenses? After all, you don't expect your auto insurer to pay for an oil change. Aren't we just round-tripping money that we could perfectly well spend on our own? I can think of four (maybe three and a half) possible reasons.
One--the most plausible in fact, I am sure--is because of taxes. The employer gets to deduct medical; we don't pay tax on it. A sensible employer ought to be willing to pay as much of our compensation as lawful in the form of medical insurance, and we ought to be glad to pay for the privilege (i.e., in the form of lower aggregate compensation). So we try to cram everything we can into the "medical" pigeonhole. Given the state of current tax law, this makes sense. But it's a stupid law.
Two--quite apart from tax law, there is the point of motivating cost-effective behavior. The medical insurer really doesn't want to pay out on, e.g., lung cancer losses for a pool of smokers. So it makes economic sense for him to pay for, e.g., stop-smoking remedies, even classes. I suppose we can imagine a world in which your right to catastrophic coverage is based on your showing that you met some cost-reducing preconditions. But we know we would never stick to our guns on that one so we don't try.
Three--children. We find a social interest in protecting against childhood, even prenatal, health issues, even if the parents don't want to. We could try--we do try--to police the parents through the criminal law but it's an expensive blunt instrument, not all that effective in the best of worlds. So we go ahead and pay up.
Finally--group buying power. Folks in our shop can buy a vision care package. People talk about it as "insurance," but it's really nothing of the sort: it's just a group buying plan, with attendant economies of scale and buying clout. Now, if only we had a national medical program, we could whip those gouging providers into line. Oh, right.
Note, I can think of a fifth possible factor in the debate, although I am not sure quite how far it counts a reason. That is: we think that medical care is just too damned expensive, and we've become habituated to having "somebody else" pay for it.
Anecdote: the Wichita bureau reports on a relative--a schoolteacher--who has tolerated a lowish salary partly because the district is picking up so much of the meds. Now, of course, the employer is trying to cut back on medical coverage, but they aren't offering to raise pay. Seems to me if they are determined to make an absolute cut in compensation, it would hurt less to cut the taxable earnings first.