UHC - employee salaries would increase, right?

If employers were no longer burdened with the cost of their employees healthcare cover, that component of the employees salary that was reserved for healthcare insurance should revert to the employee as it was part of the original employment package. Right?

No. Unless it was in a contract (which most employees do not have) the package will just change.

Certainly it’s not automatic. I expect that most employers would simply tell their employees that “health insurance is no longer being deducted from your pay,” and leave it at that. The employee effectively never saw the employer’s contribution before the change, so I expect that the employer would just keep it. Eventually some salaries might start to rise faster than they otherwise would, as employers pay out a portion of that windfall in increased salary, and some union contracts might explicitly demand that, but that would be a case by case basis.

I’m sure you’ve heard the rubric about how US employers are at a competitive disadvantage vis-a-vis other countries, because of having to pay workers’ health insurance. The only way UHC would advantage them is if they get to keep some or all of the money now being paid out as health insurance. If they were to turn around and pay all of that money back out as salary, the employers are no better off.

It is not clear to me how UHC relieves the burden for employers of paying part of the healthcare insurance premium for their employees.
The current UHC drive is to cover the uninsured, not the currently insured, although some argue it might give employees more policy options.
Healthcare costs themselves will not be diminished.
Should an employee opt for a different policy, the only salary change they would see would be their personal contribution, not the employer’s.

Right. So it could also be seen as making business more competitive, presumably not just internationally. That could then translate into a reduction in domestic inflation for example, which might boost consumption.

The uncoupling of health with employment has been a consequence in the rest of the industrialized world. In fact, it was one of the leading reasons for adopting UHC in the first place in some countries.

I guess it depends on how things pan out but I’d guess that was a primary objective.

If I understand you, yes the employee would see a larger check if there no longer was a premium deduction. Would salaries or benefits packages necessarily increase? No.

Wouldn’t taxes increase? UHC has to be paid for somehow.

If the currently uninsured are being paid for with higher premiums for everyone else, then reducing the premium has to be compensated for somewhere else.

Regards,
Shodan

True, but IMO that’s not what the OP is asking.

I don’t think this belongs in General Questions. It’s not clear exactly how UHC would affect the cost of health care, where the increase in taxes would come from, or whether employers would continue to offer health insurance in light of the government option. I suspect many employers wouldn’t have to offer health insurance at all as a result of public option, but whether their increased tax burden would make up for that windfall is not something that can be answered in General Questions.

Depends on how its paid for. You could have the same amount of money being taken out of your check for public insurance so you wouldnt see a difference. Or less money. Or more. Who knows.

I think considering everyone is used to paying monthly for insurance, then if we were to move to a universal system, it would come out of your check like it does now. Instead of it going to Blue Cross it will go to Uncle Sam.

Don’t forget the administrative hassles associated with employer-provided health insurance. My company has to pay another company to help us manage our health benefits. And we recently switched companies for that, which was time that HR could have spent otherwise. And we’ve changed our actual insurance provider/plan a couple of times in the last few years, so that’s a ton of man-hours wasted choosing, negotiating, training, and filling out paperwork.

Post #5 seems to assume that overall real income would increase, which might boost consumption. If the government gives with one hand and takes away with the other, I don’t see how that would happen.

Just the opposite, in fact. If the employee no longer pays for his own health care insurance, then he or she cannot deduct this cost from his taxes (as is now the case for qualified people - cite). So taxes for those folks are going up one way or other.

What I am trying to refute is the idea that taxpayer-funded health insurance is free. 'Tisn’t. The money has to come from somewhere. If we pay as much in taxes as we save on insurance, then we aren’t going to be more competitive or have more to spend or the rest of it.

Regards,
Shodan

In response to that post, sure. But the thread reads to me like it’s expanded beyond the simple question of the OP, and I was responding only to the OP itself.

Sure. Thanks.

I speculate that something has to give when costs tumble.

Looking at all the data it would be irrational to suggest there would not be a 4%-5% decline of GDP consumed by healthcare pa.

As GDP is currently $14 trillion, that getting up towards $1 trillion pa. of newly available something washing around somewhere - maybe as said above, it will mainly increase competitivness.

I suppose I’m just looking at a really quite massive change in USA.corp and trying to figure out what happens.

I’m an employer paying 100% for health insurance for my employees - albeit just 2 out of 3 of us.

I am fully prepared to pay the $1300/mo we pay in health insurance costs in taxes rather than to the health insurance company. It doesn’t bother me that taxes would go up because 1) I already pay that money every month anyway 2) If it were going towards UHC this means none of my employees would have out-of-pocket costs when it comes to health care, so basically their benefits would be better.

If we owe less tax than what we currently pay for health care, the money would stay with the company at least for a while and then possibly trickle down in the form of raises. But it would not be a 1:1 thing.

However, this scenario is only if there is a Universal Health Care plan - where health care is “free” for every citizen, from the government. But as far as I’m aware, there is no such plan on the table. Or if there is (I think there has been for many many years?), it’s not really a major part of the current debate.

The companies I’ve worked for, be it in H/R, systems or accounting, where I’ve had access to data the company generally charges between 10% to 25% of the actual health care policy to the employee. I’d say in the companies I’ve worked in about 20% was the going rate. Of course I’ve worked mostly with hotel and hospitaly driven companies

For instance, if you pay, say $20 per paycheck, I’d estimate it like this

$20 x 26 = $520 year (26 paychecks in a year, so employee pays this)

$520, is 20% of $2,600

So employer pays $2,080 and employee pays $520.

I doubt your employer would give you the $2,080 back in the form of cash.

It’s kind of like when you go to interview for a job an lot of employers will say the salary is $40,000/year, then in small print put, "managers work weeks is based at 50 hours per week. Which means you are making $15.38/hr instead of $19.23/hr, quite a big difference. (actually I left out the overtime bit, but you get my point)

I would think companies would try to take advantage and keep existing salaries the same but new hires would start out at less.

Hmm. Do you have a cite that costs would decline from 17% of GDP to 13% under the reforms as currently being debated?

Because the CBO doesn’t seem to think so -

Keep in mind that the current proposals only cover about half the currently uninsured.

If you meant a hypothetical system, then never mind.

Regards,
Shodan

It depends on how the UHC plan is administered. Until one single plan comes out, it’s tough to make any fair assessments. If UHC is no longer tied to employers, then it does not stand to reason that employers would be willing give the extra $ to its employers. It could happen, if one company did it or one industry did it, and it got a lot of good press forcing others to do it. Additionally, that extra money could also be taxed by the government to pay for the program, resulting in no change in income. Or worse, the employees could receive no extra money, and still be taxed for the UHC program. I think Obama claimed that he wouldn’t do that if that scenario came down, but I’m not exactly sure.

The more I think about it, this consequence of ending employer-provided health care would represent such a significant transfer from employees to employers that, politically, it would likely be necessary for the enabling legislation to address the issue in some way.