During World War II, wage and price controls prohibited businesses from raising pay. Labor was short, so to attract workers, some companies seized on the idea of offering health insurance as a perk. The IRS ruled that the cost of the insurance was deductible for the business and not taxable as income to the employee. As costs soared in the 1980s, employers turned to HMOs and managed care, restricting their workers' choices. This is like auto insurance paying for an oil change.
Employees have little incentive to self-ration the care they get.
Imagine a tax subsidy for food insurance, provided by your employer. You would, naturally, buy steak instead of chicken. Given this restricted choice, you would probably rush to a politician to complain. Instead, give that money back to individual Americans either through tax credits or rate reductions that would leave more in their pockets. The final insult of the tax exclusion is that it mainly benefits those who need it least.