Are there a long term consequences to employer based health care?

[emacknight]

@puddleglum

Your employer is not paying for your health plan, you are. If the employer did not pay for your health plan than it would have to make up the difference in salary.

Am I reading that wrong, or did you type it wrong?

So now that we screwed up and voted for the wrong guy, do you see any long term consequences to this system?

I started to wonder if as insurance costs go up, employers will be less likely to offer family plans, meaning that spouses and children might not get covered. It would certainly shift the family dynamic a lot if both parents had to work to make sure that both parents had health insurance. It seems like an artifact of the 50s that a spouse would get included with a company policy.

[YogSothoth]

@PatriotGrrrl

You mean people are happier when they have less choice over which insurance plan to buy (generally no choice, unless they decide to change jobs) and which job to take (because they have to consider which has better insurance) ?

And people are healthier when they can’t stick with the same doctor (because they had to change insurance when they changed jobs)?

I don’t think getting 32 million more people health insurance is less choice, I think that’s the spin the right wing’s trying to paint on Obama’s health care plan. 32 couldn’t afford it before, they had no choice. Now, thanks to Obama, they can afford it. They also don’t have to worry anymore about bankruptcy due to getting sick, or being denied care because of pre-existing conditions. That will make people happier.

Like Obama said over and over again, you can choose what insurance to buy. The plan will barely affect you if you already have insurance. It just makes people who don’t have it get it, and most of those people couldn’t afford it in the first place so they lack choice from the get go.

[PatriotGrrrl]

But why should it be EMPLOYMENT BASED, YogSosth?

[Really_Not_All_That_Bright]

@DanBlather

I think we have already seen the effect in the auto industry. One of the the problems they have is the rising cost of the level of medical insurance that they have negotiated with the unions. I think I remember that every American built car has $1500 of health insurance in the cost, substantially more than Japanese or German cars.

Of course, Germany and Japan have universal health insurance, so the cost doesn’t fall on employers.

[elfkin477]

@YogSosoth

I don’t think getting 32 million more people health insurance is less choice, I think that’s the spin the right wing’s trying to paint on Obama’s health care plan. 32 couldn’t afford it before, they had no choice. Now, thanks to Obama, they can afford it.

Oh please. I don’t have insurance because my employers don’t offer it and it’s too expensive to buy on my own without a group to help me negotiate a decent price (policies in NH start at $1200/year with $5000 deductable), and if I wait for Obama to help me, I might get affordable coverage in four years - you do get that, don’t you? Nothing in this bill that helps people afford insurance goes into effect until 2014. What a wonderous new policy that won’t even kick in until after Obama’s term is up.:rolleyes:

[Cliffy]

@elfkin477

What a wonderous new policy that won’t even kick in until after Obama’s term is up.:rolleyes:

Not that this is particularly germane to the thread, but did you perhaps notice how this bill squeaked by by the skin of its teeth? I would have liked all the provisions to go into effect tomorrow, but it wouldn’t have passed the skittish Blue Dogs. This did. I’m sorry you can’t get insurance today, but you will be able to get it in the next few years. Had the president held out for a faster time frame, there would be nothing – nothing for you today, and nothing for you in 2014, either.

–Cliffy

[elfkin477]

@Cliffy

Had the president held out for a faster time frame, there would be nothing – nothing for you today, and nothing for you in 2014, either.

–Cliffy

Frankly I’m skeptical that we’ll see any of this come to pass in 2014, either. Will the courts be done with all the soon to be filed lawsuits by then?

[Cliffy]

The big consequences to employer-based health care have mostly been lit upon in the thread. First, because it’s subsidized, it’s a huge regressive tax break for the well-employed. It’s not even a “flat” tax cut, because wealthy people pay higher tax rates, so they’re saving more on any dollar that isn’t taxed.

Moreover, this leads to overutilization – I saw a speech last weekend with economist Jonathan Gruber, and he told a story about this. His kids’ braces cost, whatever, $26 a month. His employer decided to offer an optional orthodontia benefit at a cost of $30 a month – not worth it, it would seem. But because of the tax-advantaged status of health benefits, that $30 out of his gross paycheck every month only cost him $22 net. So he got the insurance to pay for the braces his kids already had. But once he wasn’t paying himself, why should he make value decisions? So they got every bell and whistle that orthodontic science had created. These weren’t worth the money. But he wasn’t the one paying the money, so he overutilized.

This is a big problem – because it’s cheaper for employers to deliver $1000 in health benefits than it is to deliver $1000 in cash, the system funnels a ton of money into health insurance. This tends to raise the price of insurance for both individuals and employer-sponsored group plans to make up for the discount. At the same time, not only is there overutilization as above, it depresses wages way down, but it does so invisibly.

Another issue discussed in the OP, which is completely true, is that it leads to a landlocked labor force, esp. w/r/t experienced workers who want to join a small business. Because of health care costs, esp. when pre-existing conditions are involved (which older, experienced workers are more likely to have), someone with health insurance is never going to switch to a job that doesn’t carry it. When any component of production can’t move efficiently, that makes things cost more – this is true of the labor force just as it is of cargo sitting on a dock.

A subset of this problem is that it retards entrepreneurship, because people who are skilled can’t comfortably leave their office job to start their own shop, as there’s practically no ability to get health insurance – esp. if there’s a preexisting condition in the family. I can’t find the cite right now, but the estimated loss of small business start-ups due to this reason shocked me in how huge it was. Since small businesses are job creators and centers for innovation, this is a massive, completely sub rosa drag on the economy.

–Cliffy

[Cliffy]

@elfkin477

Frankly I’m skeptical that we’ll see any of this come to pass in 2014, either. Will the courts be done with all the soon to be filed lawsuits by then?

Yep. They’re losers. And even if they weren’t, pending cases wouldn’t stop the exchanges going into effect.

–Cliffy

[Wesley_Clark]

Most of the negatives have been covered, at least the negatives I know of
[ul]
[li]Productivity goes down because people stay in jobs they hate, or people cannot start their own businesses[/li][li]People who could retire do not. As a result a generation of young people are kept out of the job market[/li][li]The US can’t compete with international companies since so much of our health care costs, which are more expensive than foreign nations anyway, fall on businesses. [/li][li]Small businesses have trouble competing with large businesses. Large businesses tend to be self insured, small businesses have to buy a policy. And they cannot negotiate the prices the big ones can[/li][li]Jobs that offer health care become a magnet for people who need it, which seems like it’d destroy the system. The people who do not, or whose families do not need great health care do not place the premium on it that people who desperately need it do. As a result the businesses that do offer good coverage are magnets for people who are sick or have sick families, which raises their costs. [/li][/ul]
Of those I would say the fact that reasonably young people (like myself, cough) are being pushed out of the job market is a huge problem. back in 2000 there were 280 million people in the US and 132 million jobs. As of 2010 there are 315 million people and 129 million jobs. An extra 35 million people and 3 million fewer jobs. Do the math. The unemployment rate for young people is supposedly around 30%.

This is a problem in part because young people have lower health costs, more energy and work for lower wages. So keeping them out of the job market means expenses on businesses are higher. With meaningful health reform some people who wanted to could quit. I remember a coworker at my old job who retired at 61 telling me if he couldn’t get on his wifes health care plan, he would not have retired. His retirement opened up a job that someone else took. My dad can’t retire for the same reason, the health care issue. So you have a nation with millions of older workers who want to retire but can’t, and millions young people who want jobs but can’t find them, and the end result is businesses have to pay higher expenses and wages for the older employees than they would if they could retire and open up the jobs to younger workers. So that is also putting them at a disadvantage.

[DanBlather]

@Really_Not_All_That_Bright

Of course, Germany and Japan have universal health insurance, so the cost doesn’t fall on employers.

Have you been following the recent news? First, Germany and Japan pay a fraction of what the US does per-capita on healthcare. Second, in Japan workers’ health insurance is paid directly by the employer. In Germany it is paid for indirectly through a payroll tax on the employer, but because German health care costs are about 55% of the US per-capita, the employer pays less significantly less than their American counterpart.

It’s stunning to see how little people understand about the current debate.

[Procrustus]

One consequence you must remember with employer based health care is that the federal ERISA law preempts all state regulation of insurance. So, you have limited rights to sue if they act unreasonably, and you lose some important state based protections on subrogation rights.

[YogSothoth]

@PatriotGrrrl

But why should it be EMPLOYMENT BASED, YogSosth?

It’s not. You’re covered if you have a job or not.

[Algher]

Some undone real HC reform would find a way to break the ties to employer based coverage, IMHO.

I just did my taxes. I underestimated my HC expenses for last year, so I had more than my flex spending account covered. However, I made too much money to be allowed to deduct the remainder of my HC expenses.

The fact that the only way to write off my HC costs against my taxes is to go through my employer for both flex spend and insurance is crap, and keeps the handcuffs on us. I would love to see someone propose that ALL HC expenses are deductible. That would put individuals on a level playing field against their company. Add in the ability to join “groups” for better rates when buying individual policies and you can watch people start to break away from their employers.

[Really_Not_All_That_Bright]

@DanBlather

Have you been following the recent news? First, Germany and Japan pay a fraction of what the US does per-capita on healthcare. Second, in Japan workers’ health insurance is paid directly by the employer. In Germany it is paid for indirectly through a payroll tax on the employer, but because German health care costs are about 55% of the US per-capita, the employer pays less significantly less than their American counterpart.

It’s stunning to see how little people understand about the current debate.

Which part of what I said made you think I didn’t know any of that?