That’s a foolish idea. My company covers something like 75% of my healthcare costs. Detach it from my compensation and suddenly my monthly bill balloons to upwards of $1500. Nobody would by it because nobody could afford it.
1. Your company no longer supplies health care. People tell their employers that they want the money the company was spending on their behalf.
2. Nobody is buying it because it is too expensive. So what do the companies do? Go out of business? Nope. The business is a cash cow. They cut costs to the point that people DO buy the insurance.
3. And you can bet that just as with car insurance, where your age and driving record can affect your rates, this would happen in health insurance. It means that people with pre-existing conditions or older people would pay more, which is fair.
3. But wait, it gets better. Just as with car insurance, where you can choose what to protect yourself against, you could with this too. Why would a menopausal married couple need to cover pregnancy? Why would a couple where the husband has been snipped cover pregnancy? See where I am going with this.
4. Health care costs - If fewer people have insurance, more people would be walking off the street for coverage. It would become competitive just like other businesses. I had $5,000 deductible on my family back in the early 80’s. One day my daugher (mid 1980’s) broke her arm. Insurance did not cover it. It cost me around $275 from beginning to end. No, I did not leave out any zeros. Even at the time that was less than a single months premium of a full coverage plan, OFFERED BY MY EMPLOYER.
The government created this “employer, health insurance” connection during WWII when they instigated wage freezes. To incentivise potential employees, companies got around this by offering free health care insurance. Just be thankfull they didn’t offer free mortgage payments. Imagine where we’d be.
Your plan falls apart right there because companies will say no. They don't do it now, why should they do so in the future? My insurance benefits are a part of my overall compensation package, as my company loves to tell me. However, if I were to get married and get my coverage from my spouse's plan, my company will not add the amount they would have paid for my health insurance to my paycheck. They keep the savings for themselves. Make it illegal for companies to add insurance as part of compensation and they'll love you for it. It's just that much less they have to spend on employee costs.
2. Nobody is buying it because it is too expensive. So what do the companies do? Go out of business? Nope. The business is a cash cow. They cut costs to the point that people DO buy the insurance.
Again that doesn't make sense. People insure to tranfer risk. Healthy people get insurance because with their company paying a big part of the bill it's cheaper than accepting the risks. Increase the cost to the individual and you'll have a lot of people deciding that since they're pretty healthy then they'll accept the risk and forego the insurance altogether. What insurance companies will get are the ones who need the health insurance. The ones who file the claims and get the prescriptions and go to the hospital. Their customer pool will be the ones that they'll have to pay the bills for. Therefore the costs will be expected to go up, not down.
3. And you can bet that just as with car insurance, where your age and driving record can affect your rates, this would happen in health insurance. It means that people with pre-existing conditions or older people would pay more, which is fair.
People buy auto insurance because the law requires them to. Drop the law and people will tend to drop the coverage. Unless you're going to make health insurance required by law then you're going to find a lot of people who won't want to pay the premiums, which are a heck of a lot higher than auto insurance to begin with.
3. But wait, it gets better. Just as with car insurance, where you can choose what to protect yourself against, you could with this too. Why would a menopausal married couple need to cover pregnancy? Why would a couple where the husband has been snipped cover pregnancy? See where I am going with this.
Down a rabbit hole I think. What you're suggesting is that people will be have to pick and choose coverage. I'm not getting pregnant so I don't want to pay for pregnancy coverage. Do I also need to decide if I want cancer coverage or not? If so, do I need to specify coverage, i.e. yes to ovarian cancer coverage but no to prostate cancer? Should I accept the coverage for broken arms but not broken legs? Such a plan would be impossible for the individual and a nightmare for the insurance company.
4. Health care costs - If fewer people have insurance, more people would be walking off the street for coverage. It would become competitive just like other businesses.
It would not, for the reasons I pointed out earlier. Those unwilling to pay the higher premiums would tend to be those with the least need for insurance. Premiums would go up because companies would have a higher percentage of clients making claims and would be paying out more money. The more premiums go up the more people drop out and a higher percentage of those remaining will be those who can't afford not to have someone paying their medical bills.