Employer-Based Healthcare Still Needs To Go -- More Than Ever
With more and more companies laying off more and more employees during the pandemic, plus with more people freelance than ever, it's time to give this dinosaur the boot.
I've mentioned many times that after I went freelance in my 20s, I signed up for an HMO, which I paid for myself out of pocket, no employer. This is how it should be for all of us.
Dan Gorenstein writes at Marketplace
It's getting little attention right now as the GOP-led Congress struggles to pass a bill to repeal and replace Obamacare, but our employer-sponsored health insurance system is the elephant in the room.In Washington, the debate largely centers on the level of assistance the federal government should provide to the millions of people under age 65 who don't get insurance at work. Most Western nations offer universal health coverage.
More than any other country, the U.S. relies on employers to provide insurance, with more than 175 million people gaining coverage through work. For more than 70 years, the nation has struggled to figure out how to provide care to people outside that system.
Employer-sponsored healthcare started after The Depression.
The National War Labor Board forbade employers from raising their workers' salaries -- a wage cap. If our employer-sponsored insurance system has an origin story, it is this.Beyond the wage cap, the labor board also ruled health insurance was exempt from the cap, so employers began to dangle health insurance as a benefit to attract the best and brightest.
The cherry on top: The IRS decided employer contributions to health insurance premiums were tax free, which meant workers paid less out of their pocket.
Naturally, Marketplace being Marketplace, the want is for governmommy to take over.
A better solution is that we each pay for our own care as I did -- which means changing jobs doesn't mean losing, oh, your oncologist. The government could continue to subsidize people who can't afford care.
Most companies would probably welcome not having to administer healthcare programs. The administration of such programs swells their HR departments, adds costs, and does little to distinguish the company from its competition in attracting employees any more.
The two main problems with healthcare in the US are the conflation of health care and health insurance. One exists to provide regular care and screenings, the other to protect in case of catastrophe.
Industrialized health care got its start in the '30s with companies purchasing or retaining nearby hospitals to meet their worker's compensation requirements. Kaiser and other manufacturing concerns started putting medicals staffs on their job sites in the '40s to cut down on injuries and the fallout from those injuries.
The medical staffs began treating non-work medical issues as a means of keeping the employees healthy enough to remain on the job. Employees were given the option of paying a small amount to have non-work health care coverage. Eventually that coverage was widened to include the families of the employees.
HMOs were formed in the '80s with the idea that, with regular checkups and care for small problems, major problems could be avoided or detected early. The cost savings were estimated to be huge as cancers and other problems were caught early and treated before becoming major issues.
The problem no one foresaw was that, with a small co-pay, even a case of the sniffles would merit a trip to the doctor. Costs skyrocketed as doctors spent their time treating minor complaints that used to be treated at home with OTC remedies (remember "Doctor Mom?"). Trips to the doctor that used to be put off ("let's see if you're feeling better tomorrow") were undertaken immediately since the cost of a doctor visit was no longer an impediment.
We became a generation of people that went to the doctor for anything, everything. We became paranoid that every minor ache might be a warning sign of a major illness. TV and movies showed endless episodes of minor aches being warning signs of major illnesses.
Your employer, instead of paying for coverage of work-related injuries and conditions, is now paying for your and your family's overall healthcare. Blue Cross estimates that employers are paying 82% of the cost of the premiums for employees and 70% of the cost for employees' families.
When I used to do budget and staffing models, I'd estimate benefits at an additional 35% of salary costs.
However, raising salaries by 35% and taxing people an additional 30% to recapture that money in order to implement nationalized healthcare for everybody is not the answer. The explosion of unexpected costs that chased HMOs out of the market will plague universal healthcare as every hospital emergency room becomes a charity ward. Healthcare has to be returned to being an individual-level responsibility.
Conan the Grammarian at December 4, 2020 7:25 AM
Care and insurance are an insane muddle, presenting consumers with opportunities to pretend that people deserve the best care whether or not they've done anything to pay for it. Sanctimony and complexity are merged into a sensational smokescreen, masking responsibilities for everyone but doctors.
Crid at December 4, 2020 9:24 PM
Part of me wants to agree wholeheartedly with your assessment. On the other hand, there have been many things that I thought were minor that turned out not to be and vice /versa.
The strep throat that turned into rheumatic fever. The small tender spot that was a DVT. The headaches that led me to be predisposed to strokes. The cold that turned out to be Covid.
The things that could have resolved on their own - a severe bruise, though the doctor thought it was serious enough looking to send me to the emergency room, toxic synovitis, pleurisy.
I work at a school where I believe that Covid is rampant but the kids may feel lousy, but parents don’t often take them to the doctor. Several have never had a doctor visit. Even a small deductible is daunting for some families.
Jen at December 4, 2020 9:39 PM
I think a lot of stuff, for poorer people especially, is going to get pushed down to LPN's in the years ahead.
Crid at December 4, 2020 10:09 PM
That's the way it is here. Everyone chooses their own company, pays the fees out of pocket,and the poor are subsidized.
It works well. Insurance is much less than in the US. It's creeping up, though.
NicoleK at December 5, 2020 12:51 AM
I will say when I lived in SF, Kaiser was super cheap and surprisingly good.
NicoleK at December 5, 2020 12:52 AM
A way to fix the problem Conan describes is to have people pay upfront and get reimbursed. We had a plan like that for a while, it was wicked annoying. We'd get a bill for 200 bucks (francs), and yeah we'd get it back, but will still had to pay it and that was 200 francs not in our checking account. Of course it felt good when we got our nice chunk of cash back, but still. It was annoying enough to "wait until tomorrow".
Usually what happens is you call the doctor and THEY tell you to wait until tomorrow. So you do.
NicoleK at December 5, 2020 12:58 AM
Basically, we need to deregulate the whole system of insurance. Young ppl ought to be able to buy catastrophic care packages and grow their coverage as they age and their needs change. Allowing insurance companies to bypass state insurance commissions and sell across state borders would free up the system considerably.
We could really use more primary care physicians too. Medical schools need to be expanded to meet the needs of a growing population. It’s not only the poor who see LPNs. We have pretty good insurance, it used to be better before Obama, but I don’t have a prayer of seeing the actual doctor unless I can plan my illnesses three weeks out. I had shingles, which is fairly serious, and still all I got was a crappy telemedicine visit with the nurse practitioner.
Sheep Mom at December 5, 2020 8:43 AM
Bin Laden had it coming, but the rest of those wars cost us $6 trillion. We've been at this since 2001, ffs. Twenty damned years.
I'd rather spend it on government-paid healthcare and Bin Laden's head on a stick.
Gog_Magog_Carpet_Reclaimers at December 5, 2020 8:31 PM
"Employer-Based Healthcare Still Needs To Go -- More Than Ever"
Agreed.
Why are you all calling for the same old crap, including government action? Why, if someone talks about other countries' national health care plans, do you believe they are magic? Their wait times are ghastly, and you will routinely be denied by a staffer who is not sick and who explains that since paperwork is filled out, you're just fine and the system works!
You should NEVER PAY for anything you do NOT RECEIVE.
Radwaste at December 6, 2020 5:42 PM
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