Ending Employer-Based Health Insurance Is a Good Idea

Reason Online ^ | October 16, 2007 | ald Bailey

[Lorianne]

"The U.S. employer-based health-insurance system is failing," declares a new report by the Committee for Economic Development (CED). The CED is a Washington, D.C.-based policy think tank comprised of business and education leaders. And it is right: Employer-based health-insurance is indeed failing.

Between 2000 and 2007, the percentage of firms offering health insurance benefits fell from 69 percent to 60 percent. The percentage of people under age 65 with employer provided insurance dropped by 68 to 63 percent. In absolute numbers, those covered by job-based insurance fell from 179.4 million to 177.2 million.

Employers are jettisoning health insurance because costs are out of control. Since 2001, premiums for family coverage have increased 78 percent, while wages have gone up 19 percent and inflation is up 17 percent. The consequence is that health insurance is the number one domestic policy issue in the 2008 presidential race.

So what is the CED's prescription for our ailing health insurance system? The report promisingly begins by recommending the creation of "a system of market-based universal health insurance." In order to achieve this, the CED would make health insurance mandatory for every American.

The CED proposal envisions the creation of independent regional exchanges that would act as a single point of entry for each individual to choose among competing private health plans. The exchanges would set minimum benefit plans. The exchanges would also cut through the thickets of state health insurance regulations that add substantially to the costs of insurance. Individuals could purchase insurance above and beyond the minimum benefit plans with after tax dollars.

[Gene Eric]

>> True. For those that work for large corporations. It doesn’t work that way for the self employed or small businesses.

I agree with you big time. Fortunately, health insurance deductions for small biz have improved in recent years and HSAs are making progress too. It’s not enough though.

My remarks were aimed at corps that complain about health care costs and fantasize about the day gov’t takes it over. One of the arguments made by these corps is the cost of health care, and I argued how absurd the complaint is given they get fantastic group rates and can pass that along to the employee who would otherwise need to pay more on their own and inevitably force the salary levels up.

[21stCenturyFreeThinker]

We are insuring that we can go to the doctor if we catch the flu or a simple cold.

That's true, we need more incentives for people to use health care wisely. My mom is one of those who waits until after hours before she decides to deal with problems at the ER. She gets sick and dehydrates easily, a serious health risk for the elderly. She would get a lot better and less expensive care if she would just go to her doctor earlier. But she's 82 and no amount of reasoning will get her to do it differently. Now that we have her here in town we can keep a better eye on her. Raising parents is tough. lol

The other side of the coin is that the many uninsured will wait way to long to see a doctor. It concerns me that having all these uninsured people are a biological terrorism risk for all of us. Something like enhanced smallpox could go undetected for some time with the uninsured incubating it and eventually spreading it to others. It's something that needs to be thought about while we look at the whole health care problem. 9-11 was a failure of imagination if anything.

This is one of those problems that don't have an easy solution. Healthcare is already rationed in this country via pharmacy formularies and managed care. It's insurance company bureaucrats vs government bureaucrats. Both systems have their problems. I wish I knew the answer but I'm pretty sure the current system isn't it.

[21stCenturyFreeThinker]

I argued how absurd the complaint is given they get fantastic group rates and can pass that along to the employee who would otherwise need to pay more on their own and inevitably force the salary levels up.

Good points

One of the side effects of big insurance negotiating such good rates with the providers is that the uninsured end up paying a lot more for healthcare. We end up with the absurd situation that the people who can least afford healthcare are the ones who pay the most for it.

People are demanding healthcare reform and they will get it. If we don't want socialized medicine we have to come up with workable conservative solutions for these problems.