For one, private health insurance purchased individually was quite expensive, and often, it was difficult to shop and compare plans. If your employer dropped coverage or never provided it, your health coverage was probably more expensive and not as good as what many employer plans could offer.
One way to think of this is to understand that employer-sponsored health coverage is afforded by the employee and the employer contributing funds to the plan. Two parties paying for the same plan can mean a lower average cost for more services on the part of the employee than if the full burden is faced by just the individual.
This poorer private plan quality coupled with higher expenses also meant that for some, changing jobs becomes a higher-cost experience. Why would you take the risk of quitting your job to get a better one if you may be left with worse or no health insurance during the job search?
As part of an attempt to address affordability in healthcare, the Affordable Care Act (ACA or Obamacare) sought to expand access to health insurance coverage, so that at least Americans would not be subject to the full brunt of out-of-pocket health expenses.
One method of tackling this was requiring all employers with more than 50 employees to sponsor health coverage or pay a penalty to the government. This encouraged many large companies to adopt health insurance benefits for their employees.
While expanding Medicaid to help the low-income population, the ACA also gave additional subsidies to middle class Americans to purchase private health insurance from designated government-overseen marketplaces. The point of these marketplaces was to serve as a central place for individuals to shop and compare plans. The marketplace also required health plans to cover specific benefits to be considered a qualified health plan, a status required to be listed on the marketplace.
In the end, the ACA has led to the rate of uninsured Americans to drop, but some problems still persist, especially with regards to employer-sponsored health insurance.