I am reminded every day that I am lucky to be married (some days more than others) but here is at least one reason why I’ll admit I am extremely lucky to be married: I have group health insurance. It doesn’t cost much. It gives me great coverage. And I’d probably be on my back or broke if it weren’t for the fact that I am married to a person that has a job that provides it.
The last plan I had under my own name ran out in August of last year. I was able to enroll under my wife’s insurance for $140/month. In December, we were on vacation and I slipped and hurt my back pretty badly. Four doctor appointments, prescription drugs, physical therapy and massages: $200 out of pocket. What it could have been? Thousands of dollars. And knowing me, I would have sought shortcuts to ease the financial pain.
Decoupling health care was one of the things that many people at the Employee Health Care Conference rejected out of hand. While the argument made on a holistic level was that employers (especially large employers) could push for innovation better than individuals could, most of the concrete reasons I’ve heard is that employers put a lot of money into the pot and that benefits employees.
There is little doubt that companies could drive more innovation in health care than individuals if they wanted to. That’s the problem though: outside of internal cost containment or strategy, none of these companies (even huge ones) have forced the insurer and health providers hands.
So if the only legitimate concern is money, why aren’t we talking more about the separation of employment from health care? What are your thoughts on it?
February 25, 2010 at 8:51 pm
I completely hate the idea that health insurance is tied to employment. And like you, I’m fortunate that my wife has a great policy paid for by the state of Florida.
The interesting thing about the employer / insurance bond is that it was never intended to be that way. Back in the 50′s when there was a fair wage mandate, employers skirted the issue by giving their employees insurance (which at the time was dirt-cheap) instead of actually paying them more. And over time it’s become the status qou.
I could go on and on about why I think the private insurance model is complete crap, or how it’s a shame that we’re the only developed country in the world within some sort of universal health care system, but that’s not what you asked. I wish that there were standards that made it viable to individuals to purchase the same insurance that people working for large companies can do.
February 26, 2010 at 3:48 am
I agree decoupling would be a good thing. I also think that we are getting to a more “free-agent” nation for lack of a better word – and the market may just step up and provide solutions for those that aren’t tied to a specific employer.
I think there are legal and morale hurdles that need to be addressed first (selling across state lines and deciding what is minimum universal care, pre-existing conditions) but my “crystal eight ball” tells me that we will move toward a more “individual” model – without regard for employment.
I know if I were running an insurance company I’d have some folks working on this as a new line of business. At least I hope they are.
February 26, 2010 at 5:34 am
Mostly (IMO) we’re not talking about it now because the unions don’t want to lose the leverage, and the party in power is listening to the unions (“Cadillac” plans, anyone?).
That said, I am reasonably sure that there are LOTS of employers out there now who would like to get out of the healthcare insurance business – but since healthcare coverage IS one of those things that impacts recruiting/retention (particularly for “second” earners), they can’t really afford to be the “first” to drop it (particularly with no “public” option to redirect folks to).
I was very much opposed to decoupling when it was first broached – and still feel that that was a problem in 2008 for McCain versus the guy who was going to let you keep the healthcare you have now (but cheaper). But I’ve seen too many people “stuck” in jobs they hate just to get/keep the healthcare coverage. And, IMO, we’re NEVER going to get healthcare costs back under control until we get the consumers back in the driver seat.
Now, that’s going to mean some will bypass treatment they might need, some skimping on prescriptions they would otherwise take… But as long as “someone else” is paying the bills, we all are…
February 26, 2010 at 5:43 am
Great question Lance. As jobs become less permanent and more contract length, health insurance portability will become a requirement. That portability is the first step to dissolving the link between health care insurance and employment. Until that happens I don’t see many people rushing to endorse tax rebates for owning their own policy if they could get one through their employer.
February 26, 2010 at 7:54 am
We pay for our own health insurance and are having our second child in August — i.e., we no longer have full employer benefits. If more consumers of health care felt the price pain of premiums and medical costs (thankfully we’re all healthy but our premiums have gone up 25% in less than a year without even blinking), then the individual payer collective would push hard on insurers and the medical community to reduce the outrageous costs.
Employers shouldn’t be responsible for healthcare insurance anymore, but Karin is right about portability. That’s why the tea parties are rocking so hard to hang on to theirs.
February 26, 2010 at 8:31 am
By the way, hope you’re feeling better.
February 26, 2010 at 9:20 am
I see two major effects of the coupling of employment and health insurance. First, consumer choice is drastically restricted. The unavoidable result being that consumer influence over the product and its quality is drastically reduced. Second, the coupling creates small pockets of socialized medicine. Your job pay and career plans are even more important than your health insurance and costs, so workers do not balk at joining a riskier insurance pool than they could otherwise qualify for. This coupling was brought around via tax policy.
If around 60% of Americans receive health insurance through an employer and 20% are uninsured (those are approximately the stats I’ve seen thrown around) then we are leaving only 20% of the market to directly effect the products, prices and quality with their own wallets. On the other hand, far more people are affordably insured than otherwise would be, because many individuals would make poor insurance choices. They ought to join a low-risk insurance pool as soon as possible and never leave it; instead many would wait until something went wrong, or at least until they were 30+ and had a family, and they would be stuck with higher risks and premiums. Still others would get hit with very expensive illnesses while having no insurance at all.
I am very opposed to any socialization on both moral and practical grounds, but even I would rather see it socialized directly than via employers. My moderate recipe for health reform would be to equalize the tax equation for businesses and individuals, and to allow sales across state lines. Then re-evaluate the situation after five years. My radical recipe involves peeling back the heavy layers of regulation. Why must I pay for HIPAA compliance if I don’t personally give a damn? Why can’t I go to a nurse instead of a doctor for a common cold evaluation? Why can’t I self-prescribe medications?
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February 26, 2010 at 12:18 pm
i’ve also been surprised by the lack of clamoring by businesses to get out of the health care business. decoupling would be terrific, provided there was a viable alternative that didn’t break people more than the current system already does. i realistically don’t think this is coming anytime soon, but that innovation may be.
a recent towerswatson/national business group on health report pointed out that companies are increasingly frustrated by their employees’ lack of commitment to their own health and their vendors’ program effectiveness. while i think companies are doing a whole lot of finger pointing and not recognizing how their own lack of vision and commitment to integration and innovation has contributed to their own dissatisfaction, i do believe we’ll see a shift soon.
f
February 26, 2010 at 12:51 pm
As a small business owner, I’ve been asking for years why I have to be in the health insurance business as well as the software business!
I am all for the separation of employment from health care. My family switched to an HSA with a high deductible insurance plan many years ago. We love the control and accountability. I firmly believe that health care in the US would change radically for the better if everyone paid for services rendered directly.
February 26, 2010 at 1:37 pm
And I’d probably be on my back or broke if it weren’t for the fact that I am married to a person that has a job that provides it.
I’m not trying to be the grammar police or anything, but it should be really be “a person WHO has a job…” As a public author, you have a responsibility to blah blah blah…
I agree totally, Lance. I’m actually a bit shocked so many people rejected it. Decoupling health care and employment would be good for employers, too. Healthcare is a huge burden.
Separating the two would allow smaller businesses to compete more effectively. And orgs could stop getting into “whose healthcare is cheaper” pissing contests with each other.
- Chris
February 26, 2010 at 2:25 pm
I absolutely belive that health care should be decoupled from employment. Amongst other things the current set up in America is a barrier to small business and entreprenurship and a major disadvantage to unmarried people.
The problem is that this change makes sense theoretically, but would take a long, painful, and committed transition to achieve properly. Who would make it happen? The public is too whiney, the government is too flakey, and I don’t really see why it would be in big businesses interest since the health insurance situation in the States keeps people teathered to their jobs and keeps small business down.
I happen to believe that health care should be the governments domain, not the employers. But go figure, I’m Canadian!
February 27, 2010 at 9:59 pm
Health insurance should absolutely be decoupled from employment. I just spent 10 years in Switzerland: four different employers plus some time unemployed but only ONE health insurance provider the entire time. So much simpler! Not to mention less expensive than US insurance while quality of health care is easily equal to (and often better than) in the US. Everyone has health insurance because the poor are entitled to substantial discounts, there is price competition between many insurers, and the minimum standard of coverage is clearly defined by law. It’s dead simple and it works.
February 28, 2010 at 7:08 pm
Thank you everyone for your comments.
March 21, 2010 at 5:55 pm
To echo the sentiments of several who commented before me: I massively benefit by generous spousal benefits….. *AND*….. I also advocate decoupling healthcare from employment.
I won’t turn down the benefits offered through my spouse’s employer, but I think the system is patently unfair. Our family coverage (premium/co-pays/deductible) is close to free, while others pay $5000 or $10,000, depending on their employer. Or they pay even more than that, it they are unemployed, self-employed, or’ uninsurable’.
Let’s separate insurance from employment for these reasons and many more!
March 22, 2010 at 4:38 am
Let me just say that my healthcare benefits – like the level of match in my 401(k), PTO, and the rest – I consider part of what I am paid for the job that I do.
It’s not “unfair” for me to have that when others don’t, any more than it’s “unfair” that Bill Gates gets paid more than I do.
If my healthcare changes as a result of this legislation – and I fully expect that it will (and not for the better) – then I’ll be trying to negotiate an increase in pay, or a different job that pays better.
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June 16, 2011 at 8:26 pm
Couldn’t agree more…I think a consumer-driven, free-market is the only way to drive down the healthcare costs. Look at car insurance- those guys are clawing each other to get you for the better rate. My health insurance- it’s 20 min (plus!) on hold just to talk to a human. Let’s make them step up- and give employers a break. Yeah, a lot of companies would have to increase their salaries to compensate, but I am guessing most would be glad to make the trade.
Good luck, and I sure hope these voices are heard and acted upon.