# Why is health care still tied to employers? **URL:** \ **Category:** Great Debates\ **Created:** [August 8, 2009, 2:54pm UTC](https://boards.straightdope.com/t/why-is-health-care-still-tied-to-employers/505740 "2009-08-08T14:54:57Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![mangeorge](https://avatars.discourse-cdn.com/v4/letter/m/d78d45/32.png) [@mangeorge](https://boards.straightdope.com/u/mangeorge)\ **Post date:** [August 8, 2009, 6:02pm UTC](https://boards.straightdope.com/t/why-is-health-care-still-tied-to-employers/505740/21 "2009-08-08T18:02:42Z")
> [@athelas](#): > > Well part of the point was to introduce more competition into insurance markets. If you have to pick the healthcare plan your employer offers, insuance companies don’t care that much about you the customer. Instead they’ll worry about winning big corporate contracts. My company, like many others, offers a choice of three providers. And the plans do differ. ---
**Author:** ![smiling\_bandit](https://avatars.discourse-cdn.com/v4/letter/s/e9a140/32.png) [@smiling\_bandit](https://boards.straightdope.com/u/smiling_bandit)\ **Post date:** [August 8, 2009, 6:33pm UTC](https://boards.straightdope.com/t/why-is-health-care-still-tied-to-employers/505740/22 "2009-08-08T18:33:28Z")
> [@the\_first\_supraliminal](#): > > Sure, I know how it started, with 18th century plantations and 19th century logging camps and company towns that had only one doctor, so the owner just paid him. Paternalism. The owner also supplied all the lodgings and meals. Well… I won’t go into the rest of the debate, since it’s fairly straightforward. However, this is not why it got linked to employers in America. That happened because of early Progressives who effectively wanted to conscript the U.S. into a form of industrial army, and favored huge employers who offered everything employees needed. (This was their explicit reasoning and rationale.) They would own the corporations through the government, and the corporations the workers. ---
**Author:** ![the\_first\_supraliminal](https://avatars.discourse-cdn.com/v4/letter/t/f475e1/32.png) [@the\_first\_supraliminal](https://boards.straightdope.com/u/the_first_supraliminal)\ **Post date:** [August 8, 2009, 6:53pm UTC](https://boards.straightdope.com/t/why-is-health-care-still-tied-to-employers/505740/23 "2009-08-08T18:53:52Z")
Just because it’s the current tax law? That’s not a very strong reason. In other countries it’s not the case. ---
**Author:** ![the\_first\_supraliminal](https://avatars.discourse-cdn.com/v4/letter/t/f475e1/32.png) [@the\_first\_supraliminal](https://boards.straightdope.com/u/the_first_supraliminal)\ **Post date:** [August 8, 2009, 6:55pm UTC](https://boards.straightdope.com/t/why-is-health-care-still-tied-to-employers/505740/24 "2009-08-08T18:55:28Z")
> [@smiling\_bandit](#): > > Well… I won’t go into the rest of the debate, since it’s fairly straightforward. However, this is not why it got linked to employers in America. That happened because of early Progressives who effectively wanted to conscript the U.S. into a form of industrial army, and favored huge employers who offered everything employees needed. (This was their explicit reasoning and rationale.) They would own the corporations through the government, and the corporations the workers. This is funny. I guess you never took history in school, but learned it this year on right wing radio. ---
**Author:** ![mangeorge](https://avatars.discourse-cdn.com/v4/letter/m/d78d45/32.png) [@mangeorge](https://boards.straightdope.com/u/mangeorge)\ **Post date:** [August 8, 2009, 9:01pm UTC](https://boards.straightdope.com/t/why-is-health-care-still-tied-to-employers/505740/25 "2009-08-08T21:01:30Z")
I think someone read a Henry Ford biography (or watched a documentary) and got confused. I submit the [Ultimate Authority on All Things](http://en.wikipedia.org/wiki/Health_insurance) for your consideration. 😉 ---
**Author:** ![flickster](https://avatars.discourse-cdn.com/v4/letter/f/7bcc69/32.png) [@flickster](https://boards.straightdope.com/u/flickster)\ **Post date:** [August 8, 2009, 9:41pm UTC](https://boards.straightdope.com/t/why-is-health-care-still-tied-to-employers/505740/26 "2009-08-08T21:41:34Z")
> [@DanBlather](#): > > If you go to work for another company that has coverage, and if you don’t go into business for yourself, and if you weren’t laid off. If you are participating in your employer’s group health plan and you either leave on your own or are laid off, you can retain the coverage via COBRA. You are eligible to maintain that coverage for 18 months. How you leave the company has no bearing on this ability. Granted, what you will pay for coverage under COBRA will be more expensive due to your prior employer no longer subsidizing your premiums. If you have pre-existing conditions, it is almost imperative that you take advantage of the COBRA option. I have been down this road myself and paid out the wazoo to maintain coverage so that my wife’s medical conditions would be covered under when I found a new job. However, even if you let your coverage lapse, you can still enroll in your new employer’s plan. They will cover your expenses, except for the pre-existing condition for the first year and then drop the pre-existing stipulation after than. ---
**Author:** ![Kent\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kent_clark/32/105_2.png) [@Kent\_Clark](https://boards.straightdope.com/u/Kent_Clark)\ **Post date:** [August 8, 2009, 10:24pm UTC](https://boards.straightdope.com/t/why-is-health-care-still-tied-to-employers/505740/27 "2009-08-08T22:24:52Z")
> [@flickster](#): > > If you are participating in your employer’s group health plan and you either leave on your own or are laid off, you can retain the coverage via COBRA. You are eligible to maintain that coverage for 18 months. How you leave the company has no bearing on this ability. Granted, what you will pay for coverage under COBRA will be more expensive due to your prior employer no longer subsidizing your premiums. > > If you have pre-existing conditions, it is almost imperative that you take advantage of the COBRA option. I have been down this road myself and paid out the wazoo to maintain coverage so that my wife’s medical conditions would be covered under when I found a new job. > > However, even if you let your coverage lapse, you can still enroll in your new employer’s plan. They will cover your expenses, except for the pre-existing condition for the first year and then drop the pre-existing stipulation after than. Which doesn’t address **DanBlather’s** point that if you work for yourself or don’t work for an employer who offers health insurance, you may not be able to find insurance. Case in point: My daughter works for a small real estate company that doesn’t offer group health. When insurance brokers call, she tells them “we have five employees, we don’t offer group health, and my boss doesn’t intend to. However, I’ll buy an individual policy from you right now. Here are my pre-existing conditions.” So far, she hasn’t had any takers. ---
**Author:** ![flickster](https://avatars.discourse-cdn.com/v4/letter/f/7bcc69/32.png) [@flickster](https://boards.straightdope.com/u/flickster)\ **Post date:** [August 8, 2009, 10:45pm UTC](https://boards.straightdope.com/t/why-is-health-care-still-tied-to-employers/505740/28 "2009-08-08T22:45:06Z")
If I had medical issues, I think I would be looking for employment with a firm that provides access to a group plan. I have made employment decision based on this criteria in the past. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [August 8, 2009, 11:20pm UTC](https://boards.straightdope.com/t/why-is-health-care-still-tied-to-employers/505740/29 "2009-08-08T23:20:47Z")
> [@mangeorge](#): > > Of course _I_ enjoy all these bennies because I’m so special! Note, unions are disappearing. We had almost everyone covered when they were strong. Now health care coverage is fading. The quality and depth of coverage grows weaker. Companies without unions had to match the benefit to attract and keep workers. As unions got better benefits other industries and companies had to go along. Unions are getting weaker and benefits are getting trimmed too. ---
**Author:** ![UltraVires](https://avatars.discourse-cdn.com/v4/letter/u/ecccb3/32.png) [@UltraVires](https://boards.straightdope.com/u/UltraVires)\ **Post date:** [August 8, 2009, 11:45pm UTC](https://boards.straightdope.com/t/why-is-health-care-still-tied-to-employers/505740/30 "2009-08-08T23:45:06Z")
I’ve said it in other threads and I will repeat. The government, in its wisdom, has set up these scenarios: 1. I am the CEO of a multinational corporation making $60 million per year. I get a wonderful health insurance package paid for by the company in which everything is covered 100%. I pay ZERO in taxes on the money that pays my insurance premiums. 2. I work at Shithole Hamburger Joint, Inc. that doesn’t provide benefits to its employees. I do what I can to provide for my family by paying out of pocket for the individual health insurance premiums through a private insurer that don’t cover much anyways. I pay FULL income tax rate on these premiums. Can anyone give me a plausible reason why this is so? ---
**Author:** ![GIGObuster](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/gigobuster/32/421_2.png) [@GIGObuster](https://boards.straightdope.com/u/GIGObuster)\ **Post date:** [August 8, 2009, 11:46pm UTC](https://boards.straightdope.com/t/why-is-health-care-still-tied-to-employers/505740/31 "2009-08-08T23:46:58Z")
> [@smiling\_bandit](#): > > Well… I won’t go into the rest of the debate, since it’s fairly straightforward. However, this is not why it got linked to employers in America. That happened because of early Progressives who effectively wanted to conscript the U.S. into a form of industrial army, and favored huge employers who offered everything employees needed. (This was their explicit reasoning and rationale.) They would own the corporations through the government, and the corporations the workers. > [@the\_first\_supraliminal](#): > > This is funny. I guess you never took history in school, but learned it this year on right wing radio. I told him before that it is clear that he failed history forever. > [@madmonk28](#): > > I think one of the reasons the current system continues is that it makes American workers slaves to their employers. It is not slavery, but I do think it is closer to feudalism. [http://www.reuters.com/article/healthNews/idUSTRE54O4K120090526](http://www.reuters.com/article/healthNews/idUSTRE54O4K120090526) > [@](#): > > Countless workers in the United States are trapped in jobs they would like to leave because they cannot get health insurance elsewhere, calcifying innovation and mobility in the world’s largest economy. > > Daunted by health-care costs, a would-be technology entrepreneur in Texas decides not to start her own business. A communications expert in Washington decides not to strike out on his own. And a freelance magazine editor in Brooklyn decides to take a less satisfying corporate job. > > “I would rather be freelancing, no question,” said Jessica Tolliver, a former editor who now works in public relations. “I got my work done in less time, because once I finished what I had to do, the time was my own.” > > Economists call this phenomenon “job lock,” and studies suggest that it keeps between 20 percent and 50 percent of workers from leaving their current jobs. > > Because health insurance is tied to employment in the United States, workers who leave their jobs can see health bills skyrocket if they strike out on their own or take a position with a company that offers fewer benefits. Workers who would like to retire early stay on, unable to qualify for the government’s Medicare program until they turn 65. > > And those who have existing health problems may not be able to get coverage at all. > [@flickster](#): > > If I had medical issues, I think I would be looking for employment with a firm that provides access to a group plan. I have made employment decision based on this criteria in the past. The pickings are few now, and with less choices. This is not directed at you, but I think that those who oppose even a public option are in the end fighting to limit the freedom of many American workers. Start ups and foreign companies also notice how expensive it is now to hire good American workers and it seems to me that we are in practice shutting down elements that could be helping the US in its economical recovery. ---
**Author:** ![flickster](https://avatars.discourse-cdn.com/v4/letter/f/7bcc69/32.png) [@flickster](https://boards.straightdope.com/u/flickster)\ **Post date:** [August 8, 2009, 11:48pm UTC](https://boards.straightdope.com/t/why-is-health-care-still-tied-to-employers/505740/32 "2009-08-08T23:48:28Z")
> [@gonzomax](#): > > Note, unions are disappearing. We had almost everyone covered when they were strong. Now health care coverage is fading. The quality and depth of coverage grows weaker. > Companies without unions had to match the benefit to attract and keep workers. As unions got better benefits other industries and companies had to go along. Unions are getting weaker and benefits are getting trimmed too. None of the employers I’ve been involved with since the early 70s have had ANY involvement with unions and they all are still offering very competitive wages & employee benefit packages. That’s one great benefit of a free employment marketplace, if your employer should decide to not take care of their employees any longer, their competitors will be glad to welcome you with open arms. As I said earlier, firms openly compete for qualified, dependable employees (even in down market times) ---
**Author:** ![flickster](https://avatars.discourse-cdn.com/v4/letter/f/7bcc69/32.png) [@flickster](https://boards.straightdope.com/u/flickster)\ **Post date:** [August 8, 2009, 11:53pm UTC](https://boards.straightdope.com/t/why-is-health-care-still-tied-to-employers/505740/33 "2009-08-08T23:53:22Z")
> [@jtgain](#): > > I’ve said it in other threads and I will repeat. The government, in its wisdom, has set up these scenarios: > > 1. I am the CEO of a multinational corporation making $60 million per year. I get a wonderful health insurance package paid for by the company in which everything is covered 100%. I pay ZERO in taxes on the money that pays my insurance premiums. > > 2. I work at Shithole Hamburger Joint, Inc. that doesn’t provide benefits to its employees. I do what I can to provide for my family by paying out of pocket for the individual health insurance premiums through a private insurer that don’t cover much anyways. I pay FULL income tax rate on these premiums. > > Can anyone give me a plausible reason why this is so? Does the employee at the “Shithole Hamburger Joint” have a chain around their ankle making them stay there? They are free will employees, not slaves. Get thee to a better job. ---
**Author:** ![GIGObuster](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/gigobuster/32/421_2.png) [@GIGObuster](https://boards.straightdope.com/u/GIGObuster)\ **Post date:** [August 8, 2009, 11:59pm UTC](https://boards.straightdope.com/t/why-is-health-care-still-tied-to-employers/505740/34 "2009-08-08T23:59:27Z")
> [@flickster](#): > > None of the employers I’ve been involved with since the early 70s have had ANY involvement with unions and they all are still offering very competitive wages & employee benefit packages. > > That’s one great benefit of a free employment marketplace, if your employer should decide to not take care of their employees any longer, their competitors will be glad to welcome you with open arms. As I said earlier, firms openly compete for qualified, dependable employees (even in down market times) I do not see any automakers wanting to give the same benefits to the auto workers that lost their jobs. In any case, even if competition is there, the health insurance in the US does not depend on the decisions or promises of your new employer alone: [http://www.alternet.org/blogs/action/140364/stuck\_in\_your\_job\_because\_you\_need\_the\_health\_benefits\_you’re\_not\_alone./](http://www.alternet.org/blogs/action/140364/stuck_in_your_job_because_you_need_the_health_benefits_you%E2%80%99re_not_alone./) > [@](#): > > In the United States, the majority of people get their health insurance through their job. Many have an immediate need for that coverage, either because they or someone in their families has a health condition that requires ongoing medical care. These are the millions of people for whom losing their employer-based coverage would have dire financial and health consequences. And for many of them, it means staying in a job they would rather leave to keep those health benefits. This phenomenon is referred to as ‘job lock.’ > > Economist Scott Adams has found evidence of pretty wide-spread job lock. His research has found that: > > ``` > * among men aged 25 to 55 with spouses, there is an approximate 22 percent to 32 percent reduction in job mobility stemming from health insurance coverage; > * there is slightly more job lock among married women; and > * job lock has increased since 1988. > > ``` > > Overall, Adams’ results are consistent with earlier studies that found job mobility was reduced by 26 percent to 31 percent due to the lack of portability of employer-provided health coverage. > > That means millions of people are not switching to more satisfying, perhaps even more lucrative jobs, because they need the health benefits being offered by their current employer. And they are right to be afraid. This is what can happen when they take the chance: > > ``` > "Michael Courtney was 41 years old when he was diagnosed with a rare form of lymphoma. It started on his tongue, but spread quickly. He has had radiation and chemotherapy. Treatment will continue indefinitely. So will his bills. > > "An auto mechanic, Courtney was hesitant about changing jobs because he didn't want to lose his health insurance. But a new employer promised immediate benefits so he took the job. He was even able to stay with the same insurance company that he had at his old job. But a month into the new job, he found that the new policy wouldn't cover his cancer for three months. His disease was a pre-existing condition. Already strapped with medical bills, he postponed treatment." > > ``` ---
**Author:** ![GIGObuster](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/gigobuster/32/421_2.png) [@GIGObuster](https://boards.straightdope.com/u/GIGObuster)\ **Post date:** [August 9, 2009, 12:03am UTC](https://boards.straightdope.com/t/why-is-health-care-still-tied-to-employers/505740/35 "2009-08-09T00:03:21Z")
> [@flickster](#): > > Does the employee at the “Shithole Hamburger Joint” have a chain around their ankle making them stay there? They are free will employees, not slaves. Get thee to a better job. Ok my liege 🙂 However, it is clear that now you are really ignoring the current situation, it is true that your position made sense in medieval times, so it is understandable. 😛 ---
**Author:** ![UltraVires](https://avatars.discourse-cdn.com/v4/letter/u/ecccb3/32.png) [@UltraVires](https://boards.straightdope.com/u/UltraVires)\ **Post date:** [August 9, 2009, 12:05am UTC](https://boards.straightdope.com/t/why-is-health-care-still-tied-to-employers/505740/36 "2009-08-09T00:05:37Z")
> [@flickster](#): > > Does the employee at the “Shithole Hamburger Joint” have a chain around their ankle making them stay there? They are free will employees, not slaves. Get thee to a better job. I don’t work there. I’m just asking if this makes tax sense? ---
**Author:** ![flickster](https://avatars.discourse-cdn.com/v4/letter/f/7bcc69/32.png) [@flickster](https://boards.straightdope.com/u/flickster)\ **Post date:** [August 9, 2009, 12:36am UTC](https://boards.straightdope.com/t/why-is-health-care-still-tied-to-employers/505740/37 "2009-08-09T00:36:29Z")
I’m calling Bull Sh\*t on the “Job Lock” theorist Participating in a group plan with your current employer does not make you a slave to that company and prevent you from taking a more desirable position. The pre-existing condition clause ONLY comes into play if there is a lapse in coverage. If the firm that has the more desirable position you want to move to offer group health insurance, you’ll be able to enroll in their plan while your old plan is still in effect. Thus, the pre-existing condition clause is waved. Doesn’t seem that hard to understand to me. ---
**Author:** ![flickster](https://avatars.discourse-cdn.com/v4/letter/f/7bcc69/32.png) [@flickster](https://boards.straightdope.com/u/flickster)\ **Post date:** [August 9, 2009, 12:37am UTC](https://boards.straightdope.com/t/why-is-health-care-still-tied-to-employers/505740/38 "2009-08-09T00:37:55Z")
> [@jtgain](#): > > I don’t work there. I’m just asking if this makes tax sense? The concern is having coverage, I really don’t give a damn about the taxes ---
**Author:** ![flickster](https://avatars.discourse-cdn.com/v4/letter/f/7bcc69/32.png) [@flickster](https://boards.straightdope.com/u/flickster)\ **Post date:** [August 9, 2009, 12:47am UTC](https://boards.straightdope.com/t/why-is-health-care-still-tied-to-employers/505740/39 "2009-08-09T00:47:26Z")
> [@GIGObuster](#): > > I do not see any automakers wanting to give the same benefits to the auto workers that lost their jobs. Why should an employer provide the same benefits to ex-employees? Maybe being a union member gave them a false sense of security that their job could never be eliminated…that’s the very lack of flexibility that helped sink the automakers, along with the unionized jobs in other industry that have been exported out of this country. ---
**Author:** ![GIGObuster](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/gigobuster/32/421_2.png) [@GIGObuster](https://boards.straightdope.com/u/GIGObuster)\ **Post date:** [August 9, 2009, 12:51am UTC](https://boards.straightdope.com/t/why-is-health-care-still-tied-to-employers/505740/40 "2009-08-09T00:51:19Z")
> [@flickster](#): > > I’m calling Bull Sh\*t on the “Job Lock” theorist No wonder, as it demolishes your points. Besides, it is not only him, other economists reported on that phenomenon before. > [@](#): > > Participating in a group plan with your current employer does not make you a slave to that company and prevent you from taking a more desirable position. Good thing that I mentioned feudalism, look it up, the peasants were not slaves but good luck to them if they decided to set up shop outside the city or castle walls in medieval times. > [@](#): > > The pre-existing condition clause ONLY comes into play if there is a lapse in coverage. If the firm that has the more desirable position you want to move to offer group health insurance, you’ll be able to enroll in their plan while your old plan is still in effect. Thus, the pre-existing condition clause is waved. > > Doesn’t seem that hard to understand to me. Sadly, the insurance companies (specially in the last example) demonstrate that they do not understand your “clear” points either. [Previous page](https://boards.straightdope.com/t/why-is-health-care-still-tied-to-employers/505740.md?page=1) [Next page](https://boards.straightdope.com/t/why-is-health-care-still-tied-to-employers/505740.md?page=3)