So when jobs have asked me to apply for health insurance there are usuallly 4 options.
Self
Self plus partner
Self plus partner and kids
Self plus kids, no partner
Would letting people add friends or family lower uninsurance rates? Like if i had a 32 year old friend who was uninsured i could pick a self plus partner plan. Or the 28 year old employee with an uninsured or under insured 56 year old mother?
Health insurance only seems to cover romanric partnerships sadly. But i wonder if opening up employer plans so people can do things like add anyone age 18-64 would reduce uninsurance rates.
One worker is married. Her employer pays for her and her spouse’s insurance. One worker is not married. Her employer pays for her insurance, but not the insurance for her elderly dad. Why is that?
Most likely the law. While I don’t know to what extent this is legally correct, I was told in class in high school that the government function of recognizing marriage was to create one economic unit out of two. The problem with trying to apply this to non-romantic relationships is the existence of incest laws. Two unrelated friends can, in this day and age, be married if they’re not married to anyone else, and can get divorced when one wishes to marry someone else. Does it actually happen? I don’t know, but it could. However, you will probably run into problems if you say you want to marry your parent, child, or sibling, despite having the same economic relationship with them as with a married partner.
So it would be up to the government to create some sort of equivalent to marriage that would be as hard to get out of as actual marriage in order to justify treating people similarly to spouses with respect to certain benefits that spouses get, but wouldn’t be beholden to incest laws. Either that or get the government to carve out something specifically for health care.
Personally, I find that due to the subsidies offered, absolutely anyone can afford health insurance. The main reason to not get it is that you’ll lose money on the deal unless you need catastrophic care, which would be provided without regard to payment ability anyway. That was the point of the non-coverage penalty as it was originally designed, to provide an economic incentive for people to not become freeloaders on the off-chance they needed catastrophic care.
Employers don’t offer benefits out of kindness, but to attract workers. And the costs of said benefits cannot exceed what the employer gains from attracting/hiring/retaining good candidates.
And elderly dad, in your example, is likely covered by Medicare/Medicaid or other benefit program on his own.
Employee insurance seems cheap because the employer is paying a big chunk of that. Adding your college roommate to your plan would mean the company could be paying $10k+ per year for that person’s insurance. However, the company wouldn’t get any benefit to offset that cost. Sure, you may be happy that your friend now has insurance, but it doesn’t add to the company’s profit. Giving employees and their immediate families insurance means the company can attract better employees and employees aren’t having to worry about their family’s healthcare. In most cases, an employee’s performance is not affected by the health situation of their friends and distant relatives. Since there’s no improvement to the company’s profit, there would be no reason for the company to take on thousands of dollars of extra costs for people not closely associated with the company.
But as for the question in the OP, it certainly would help get coverage to more people. But it’s not a practical or economically feasible idea. A solution for this situation is to have government backed insurance plans so that people without employer insurance could get similar insurance through the government backed plans.
This is exactly it. When I worked in management for a small company years ago I was astonished at the rate the the employers were paying to cover their employees health insurance.
This was during a transition period where the workers were going to have to contribute to paying part of the insurance cost, up until then the employer paid 100%,
The employees were now going to have to have something like $120 per month taken out of their paychecks and they were having quite a fit about it.
The company was actually paying close to $1500 per month for each employee. The part that the workers had to pay was a small attempt to of set that cost.
Any company that is providing health care coverage for emplyees, in the US, is paying a lot of money for this ‘benefit’. That is where things like $6000 annual deductable come from. So that you are actually paying most of annual your health care costs unless you have some major medical incident, and that is where the insurance comes in, so you don’t end up stuck with a $250,000 bill for a few days in the hospital. You just have to pay the first $6000.
Health insurance is a very, very expensive benefit for a business to offer. Why would they offer it to a non-employee?
The general reason to offer health insurance in the first place is to get money to your employees tax efficiently. At least, that’s how my boss understands it and why he pays for as much of my health care as he’s allowed under a QSEHRA. If your employee is going to otherwise have to pay for someone else’s medical care, it’s more tax efficient that the person is covered by the employer’s health plan. That’s why there has to be some legal relationship between the people such that they should be considered part of the same economic entity. If they are just a random people, it makes no sense. If they have a government-approved resource sharing relationship, it makes some sense.
Maybe that’s what’s wrong with America. Maybe “Fairness” out to be at the center of how we arrange our economy. Which exists solely to satisfy the desires of the collective body of people who live in it.
The fact that most U.S. employers, today, are still paying the lion’s share of their employees’ health insurance premiums has already been mentioned: on average, an employer 83% of the premium for an individual employee, and 73% for an employee plus their entire family. So, adding in additional “participants” to an employee’s insurance coverage, who aren’t immediate family members, increases the cost to the employer significantly, to cover people who aren’t directly related to their employees.
But, beyond that, many large employers run what are called “self-funded” health insurance plans. They typically contract with a health insurance company to manage claims, provide network services, etc., but the employer, themselves, manages the “risk pool” (i.e., the pool of money set aside for paying claims). Here, again, the money that the employer is placing in that savings account to pay for medical claims is, today, for the medical expenses of the company’s employees (and dependents); allowing employees to add friends or more distant relatives to their coverage would make it more expensive to operate.
Would being able to do this get more people insured? Very likely so. But, it would have the immediate effect of putting that additional cost onto the companies which are providing the insurance, and it would ultimately get passed through to their employees, through requiring employees to pay an even higher percentage of the cost of their insurance.
Should an employee with two children receive a higher salary than an employee with one child, in the interest of fairness? The family with two has higher expenses.
Companies generally receive a discounted rate for health insurance from their provider. This rate may actually increase, as more people are insured because the likelihood of additional claims increases. So having additional insured, other than that required by law is a potential additional cost.
In Hawaii, employers are allowed to have the employee pay up to 2.5% (not to excess 50%) of health insurance costs. But are not required to cover any additional insurance costs for anyone other than the employee. This is why some couples choose to have two individual insurance plans, rather than having a joint plan, where they’d have to pay the full amount for their spouse/domestic partner’s insurance.
We need to have fewer people whose health insurance is decided by the whims of an employer, not more.
I’d go the other way and allow any employee to elect to take any offered benefit in cash. Allow the full payroll taxes to come out of it, whatever, but the current situation is basically an old-fashioned company store. You get scrip that you can only spend on whatever your employer thinks is good for you, and if you don’t want/need it, you get thousands of dollars of compensation taken away.
If we’re going to have a private system, well, that’s the decision we’ve made or maybe just the pot we’ve been slowly boiled in, but that means we need markets, and markets require money that’s free to move around in response to users’ wishes and needs. If we absolutely must have a system funded by hidden money remitted by employers, then it should work like Germany where you pick the insurance you want and simply instruct your employer where to send their money.