Um, if you run a business, you insure your assets. Why does it make sense to insure your building against fire, but not your most important asset against analogous “damage”?
The benefit of the system accrues to the employer just as much to the employed.
Companies - especially larger ones - have more negotiating power vs. individuals. This means a company can usually get a better “per-person” rate for their employees than the individuals negotiating on their own.
At least I appreciate your candor, if not you attitude.
If by shallow you mean “not retarded”, then sure. Caring about anonymous others is an entirely unnatural, unneeded, dangerous and unjustifiable behavior. It’s commendable and honorable, of course, but that doesn’t make it rational or sensical.
Nonsense. There’s no way that the cost of health insurance comes back to employers in work by employees. Employees pay for health insurance for the same reason they pay wages: as part of the compensation they need to pay to get people to work for them.
Agree with **Renob ** on the facts.
Emphasis added. The support for employer provided health insurance is, however, contingent on the majority of employers continuing to offer good insurance. Obviously some still do, but more and more people are finding themselves without employer-provided insurance. Further, as that happens, even more people can envision themselves losing insurance.
The fact that this system served the majority well for some period of time is why it has endured, but doesn’t guarantee it will continue. Businesses are finding these health insurance costs hard to sustain. The figures you see are around $11-14,000 per year for an employer to cover a family of 4.
I disagree. Work needs to be done. If the work is not done, the company does not make money from it. They either have the work not get done, or pay someone else to do it, or have the employee work try to make it up. It all costs them money. Suppose a person has a condition that affects his performance. The condition can be controlled by medication. If an uninsured employee cannot afford the medication, productivity suffers. So it is in the company’s interest to make sure he can get medication.
A healthy employee is a productive employee. Productive employees make money for themselves and for the company. The company and the employee pay taxes on the money they make, so the government benefits. The government funds many projects that benefit society. So health insurance is good for everyone.
The best answer being “Neither, I want my boss making my health care decisions for me - using the same thought processes I’ve seen him apply to all his other decisions.”
Are employees with health insurance more productive? Probably. By enough to cover the employer’s cost of health insurance? Not likely. Besides, many would buy their own if they had to (I know I would). Employers provide health insurance for the same reason they provide retirement benefits and salary.
Minimum wage in this state is about $8/hour. But there are taxes, so let’s say the take-home pay is more like $6/hour. At that rate, if the employer did not pick up the bulk of the premium, an employee would have to work 75 or 80 hours a month just to pay for insurance (going by my employer’s plan). So someone at a minimum wage job will be paying as much as half of their take-home pay on insurance. The other the other three-quarters goes to rent. And another quarter of goes to bills and groceries. Wait… How many quarters is that? And what if he has a ‘pre-existing condition’ that increases his monthly premium twice? Or ten times?
It is a minor saving to the corporation as the company would also have to pay FICA on the money if paid as salary (unless above the cap).
That’s speculation and opinion. I disagree.
This one was destined to leave the GQ nest sometime, so, go…fly…shoo.
samclem GQ moderator
I said many (not all) would buy their own, and that wasn’t even my main point. Besides, are you saying that employers buy insurance for minimum wage workers voluntarily? The cheaper the labor, the less sense it makes to spend money on insurance to avoid sick days or lower productivity.
No more so than your original assertion. I would argue that Occam’s razor on my side (the same thing that explains wages, retirement, and other compensation is sufficient to explain health insurance). I would add that insurance that paid employers when their employees couldn’t work, or worked less efficiently, would be analogous to fire insurance, but health insurance is not. But I don’t do GD.
‘Many’ might be a large number, and yet be a small percentage.
My use of the minimum wage was to illustrate that ‘many’ people cannot afford to buy health care even if they want to.
In any case, I don’t think employers should be buying insurance for their employees. Universal coverage provided by the government would make the businesses more profitable. More profits mean more taxes. Of course some of those profits can be passed along to employees – who pay taxes. By removing the burden of providing health coverage from employers companies become more competitive against foreign companies. Thus the trade deficit may be reduced. If more things are being made here, then more people will have to be hired. And these people buy things and pay taxes.
When I started working 20-some years ago I paid a reasonable premium in addition to what my employers paid. I could go to any doctor without regard to whether he was on someone list, and my insurance would pay for whatever was needed. Today I feel that my part of the premium is ‘reasonable’, even though I’ve only received about $75 in benefit from it. (New glasses. My ‘co-pay’ was considerably more than $75.) But I have to go to a ‘listed’ doctor. In the case of my glasses, there is one optometrist in town who is on the list. And if I have to have a medical procedure it might not be paid for. Insurance companies are required to make a profit, and the best way of doing that is to not pay claims. So I’m paying the same percentage (or more) of my income for coverage that I paid 20 years ago, but I’m getting less for my money. I believe it would be better to pay that money to a non-profit insurer (the government) to get the coverage I might need.
Of course it’s rational and sensible. How long do you think a society of sociopaths would actually last ? Caring about other people you don’t know is part of what makes society function.
If people, even the majority of people didn’t care, then I doubt modern civilization would last a year before destroying itself. The police can’t be everywhere, and socipathic police wouldn’t do a good job anyway. It would be like a real-world multiplayer worldwide game of Grand Theft Auto, with the majority of the population looting and killing and destroying for fun and profit. The cities would burn down from the millions of vandals and arsonists, stepping outside would risk getting shot by some random person for the fun of it, commerce would be almost impossible because no one could be trusted. Most of the population would die off.
Utter selfishness does not dominate the world, because utter selfishness is stupid on a large scale. Such people exist, of course, and they can even become powerful, but if they ever dominated the population everything would be destroyed. America is well along towards such domination, which is the souce of many of it’s problems.
No, it’s in the company’s interest to fire him and get a healthy employee. Or force him to work harder despite his sickness, even if it kills him. Or to move to a country that either lets them do those things, or pays for employee’s health care.
Why not just have him arrested and shot? It’s been done before.
(Hey, you omitted your smiley!)
Because that’s hard to pull off in America these days. Which is one reason to move to some Third World hellhole where they can and do just murder employees they don’t like.
Thirty nine responses, and only one has come close to hitting on the most important issue.
The advantage of employer-provided health care is that it is a way to break the problem of information asymmetry.
Insurance markets in health care have a serious problem - An insurer doesn’t have good information about the state of health of people who are seeking to be insured. Therefore, the insurer has to set a price that is high enough to cover the people who are high risks. This prices out the people who are low risks, which means the aggregate population of insurees have worse health than average. This causes insurers to raise prices higher, which prices out the next-healthiest people on the margin, and so on.
This is information asymmetry, and it causes a market failure in insurance markets. Insurers try minimize this problem in several ways. One is to require health screenings and medicals for applicants. But people lie about their health, and medicals don’t reveal all. So it’s only a partial solution.
This problem exists in other insurance markets to some degree, but the severity is much greater in health insurance because the consequences of picking up a poor risk client are severe. If you get the risk wrong for an auto insurance applicant, the odds are low that you’ll get hit with millions of dollars in cost. More likely, the driver will get a few tickets or get in more than one minor accident, exposing the risk, and the insurance can dump the client after only paying out a few thousands of dollars. But if you pick up someone who is a high risk for dialysis or AIDS or some other expensive condition, it can cost hundreds of thousands or millions of dollars.
What insurers really want to do is pick up a clientele made up of a random selection of individuals across society. Then their actuaries can apply statistical methods to figure out the cost of the risk they are taking on, and price themselves accordingly. But how do you do that? Well, a good approximation is to set up health care through employers. Unless employees are working there specifically for the health coverage, this should ensure a pretty good sampling, at least within that industry.
So that’s why employers offer health care - because they can offer it much more cheaply than individuals can typically get, and therefore it gives them a way to attract employees. Note that many of these programs are not optional, or if they are, opting out doesn’t save you much. They also go out of their way to ensure that even if a spouse is insured for the family, there is some extra benefit to maintaining both insurances. This is intentional, to prevent the same kind of selection problem that exists in the individual insurance market.
So, short answer - insurance is commonly offered through employers because employers offer a way for insurance companies to find the kind of clients they need to price their product efficiently, and this has caused employer-based insurance to have a big market advantage over privately-sought insurance.
In the same vein, professional associations and unions often offer insurance programs - life insurance, car insurance, home insurance, etc. The power of selecting from a large group of random-risk individuals makes such insurance a good value and the market organizes itself accordingly.