I think you have some misconceptions about what insurance is and are confusing health insurance with government subsidies.

Correction on "subsidies" refered to, inview of comments by globalvillageidiot on Sep 06 2007. I am refering to fixed set of payments doctors generally receive from insurance companies for services rendered to patients. This provides acts as a type of subsidy for inefficient practices.

Again, you have some misconceptions about what insurance is (although this is not too surprising considering what insurance has become). Insurance is not contrary to a free market. It is rooted in the idea of "shared risk". If, in a hypothetical population of 100, an on an average, of 2 people a year require treatment that costs $1,000 (which would bankrupt anyone in this popluation)and if everyone pays $20 (which everyone can afford). Then the 2 people who do get sick are covered, regardless of whoever they are and nobody goes bankrupt. The real life situation is a lot more complicated.

Also you mention "It's common sense which would you choose:A) Salary + Medical insurance cost.B) Fraction of Salary + NO medical insurance cost." I think what you mean is A) fraction of salary + medical insurance or B) salary + no medical insurance cost. I'm guessing you're younger. You can get by without seeing a doctor most of the time and don't make a lot of money and are tired of seeing so much what you're employer is paying in your behalf not going to you (this was also my situation when I was younger). Many empolyeers have a "buffet" style compensation system. You have your base salery and can put parts of that to life insurance, medical insurance, 401K, so many of the things a younger empolyee doesn't want to think about so they want all of it to go to them in cash. A lot of employers have been burned letting empolyees go without medical insurance and now insist that you can only forgo it if your spouse has insurance that you are covered under. Companies are contributing to medical insurance becasue they're nice guys. They're doing it because if you are hit with a serious illness, don't have insurance and wind up not being able to work, then they have to go out, hire and train someone else. It's cheaper for them to make health insurance availible (for many companies, its easier to just get someone else, or they're sort sighted themselves).

You also mention India. I assume you're talking about Medical Tourism which is becoming very popular. But it is medical insurance that fuels the medical tourism industry in India and other countries. Insurance companies will often pay your travel and hotel expenses to save money if you REALLY want to do this and will sign something that says they (the insurance company) isn't responsible if the medical provider (who is cheaper in part because of less legal oversight, quality assurance and accountablilty) screws up and kills you.

In response to globalvillageidiot's comment on Sep 08 2007.

I my statement regarding salary is correct.Here is real world example and a situation a fellow employer is currently facing.

Keep jobs in America:Salary: $50,000Insurance: $12,000 (employer contribution only)Total Cost: $62,000

Move jobs to India:Salary: $30,000Insurance: $0Total Cost: $30,000

Which would you choose, keep in mind you have a business to run and competitors.