Tag Archives: employer-based insurance
Employers to the Rescue?
In Part 1, I explained how the only way hospitals have been able to survive their money-losing Medicare and Medicaid patients has been to charge higher rates to private payers. That’s why private insurance now costs $1,788 more per family than it would if the government paid the same provider prices as everyone else. Moreover, health reform’s promised addition of 15 million new Medicaid patients, along with billions of dollars in lower Medicare payments, will drive the demand for private subsidies even higher. Additionally, as the current 27 million individually insured begin transitioning to the insurance exchanges in 2014, their continued ability to pay higher hospital charges is doubtful. Ditto for the 17 million uninsured who are expected to sign up for exchange insurance. Indeed, under health reform, exchange insurers may need their own external financial assistance. That leaves only private, employer-based insurance to pick up the slack by paying ever higher hospital prices. That, too, is unlikely to happen.
Wednesday night (6/24/09) ABC News ran a special commercials marathon with frequent and brief interruptions by Charlie Gibson, Diane Sawyer, and others to ask President Obama about his health care reform plans. The commercials were more informative.
But a few points leaked out that did illuminate, however dimly, the President’s plans to reform our universally-acknowledged mess of a health care system. Among the more interesting was the pledge that his public health insurance plan would operate on a level playing field in competing against private insurers while presenting a better deal to America’s self-employed and uninsured. Among his points were these:
- As a nonprofit organization, the public plan will offer lower premiums because it won’t have to earn profits.
- The public plan will not be subsidized by the government, but will float on its own bottom with its own premiums and expenses.
- Any government subsidies will be for individuals—not the public plan—to help them buy insurance, whether they choose the public plan or private insurers.
We recently witnessed the entry of yet another health reform bill, this time from Republicans promising, among other things, preservation of employer-based insurance. This echoes President Obama’s similar pledge. Such rare bipartisan agreement is consistent with polls showing that most Americans are happy with their health insurance, just not its cost.
Unfortunately, that’s like a third of all Americans saying they’re happy about being obese, just not about its health risks. You can’t have one without the other. The fact is that employer-based health insurance is, inherently, a big cause of our health care problems—so is Medicare. I’ll go into more detail on the fundamental failings of both programs in subsequent postings.
Right now I want to focus on a more basic question: what are the goals we want health reform to achieve? Trying to preserve one particular form of insurance, whether employer or government-sponsored, is not one of them. Allowing everyone to obtain affordable health insurance is. Getting health care costs under control is not by itself a goal. Getting sustainable quality and affordability is.