Right now on Fox News they are talking about the costs of the health care bill to small businesses, and you’ll be shocked to hear the commentator was describing how it will cause their demise.
Try to set aside your ideological beliefs for a second, try to forget about the health care bill, and consider this issue from a more practical stand point. There are social and economic consequences (whether good or bad) to having health insurance tied to employment, and I would like to explore them here.
I have an employer provided group health plan that costs me $800 a year with an $4,000 deductible. To get a similar private health insurance plan (trying to compare apples to apples if that’s even possible) would start at $2880. When I look a bit closer at the plan details I think the policy closest to what I have would be $3396 per year.
Recently I was asked, “Why do you think your premium is so low?” There are two answers: it’s a group of 8,000 people so larger group means smaller risk; my employer is picking up the tab for half of my premium. My employer is huge, and able to negotiate a better health care plan. This gives them a huge advantage over smaller employers. To me that suggests that the current system hurts small business.
I would argue that without external interference, this gap would continue to grow. We all seem to be in agreement that health care expenses are going to continue to go up. It follows from that that health insurance will continue to grow, and from that the gap between private insurance and group insurance will continue to grow.
Here are a couple of anecdotes to show what I’m thinking:
Over the past couple of years, I have had friends dream of getting out of a massive organization and work for a smaller firm. In 3 of the 4 most recent cases they didn’t because of the cost of health insurance at the smaller company.
I also had a couple of friends recently that wanted to take a layoff package and start their own business. One of them crunched the numbers and decided that he couldn’t afford the cost of health insurance. The other waited until he could get on his fiance’s insurance.
I work with this sweet old lady, one day out of no where she began to bitch about how her husband had planned to retire at 55, but because of a heart attack at 54 his planned changed to working until 65* when he could switch from employer based to medicare. He stayed in the workforce longer than he wanted to, because of health care decisions.
To me, this suggests that the free-market and innovative environment so heralded in the US is disappearing, because of employer based health care. I admit they are anecdotes and don’t count for much. But do you hear a lot of people saying, “I don’t need health insurance so I’m going to…” My argument here is that the statement, “I need health insurance so I’m going to…” is much more pervasive.
After living in the US for nearly 5 years I’ve begun to notice the way the quest for health insurance has altered your mindset towards employment. On this board I consistently hear comments made to the effect, “if you’re sick, find a job with health care, even if it pays less, even if you have to drive an hour even if you don’t like it, even if you would be more productive doing something else.”
It seems as if the definition of job and employment has changed to mean “a way to get health insurance.” People are choosing lower paying, less “productive” jobs, in order to secure health insurance.
The US is remarkable for the ability to make money in unique and creative ways. But the concept of a dream job, doing what you love, or doing what you are good at is gone, replaced by the quest for health insurance.
In one of the ways the US is more free than Europe, I could start my own bank here. I think that would be kind of fun, I’d get one of those weird visors and come up with crafty ways to screw people. But I won’t, it’s not enough to make $100,000 a year any more, I need group based health insurance.
I’ve come to the conclusion that Americans are no longer as free as they think they are. It’s all about getting employer based health insurance and moving on from there.
So what do you think, do you see any positive consequences to having employer based health insurance?
*I think she might have been wrong, since I think there is a provision to get medicare earlier if you have health conditions.