Tag Archives: employer health insurance

IS EMPLOYER HEALTH INSURANCE DYING?

One of President Obama’s most frequent health reform mantras is, “If you like your health care plan, you can keep your health care plan.”  This is consistent with his belief that we “must build on the current employer-based system” that insures 158 million people who comprise the vast bulk of all privately insured Americans. There is just one problem with this approach: employer-provided group insurance is dying and cannot be saved. Despite its longstanding dominance, group insurance, whether self-funded or provided by outside insurers, suffers from major flaws that are increasingly exposing its fundamental unsuitability as an even partial solution for effective health care reform. This is true for all employers, no matter what size. Here are group insurance’s more pronounced shortcomings:

1.    Lack of Portability: Group insurance ties the individual to his or her job, an anachronism in an era when people change their jobs as often as their cars. And if you lose your job through layoffs or illness, you soon lose your insurance as well. If you can’t find affordable individual coverage, then welcome to the ranks of the uninsured.

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THE EMPLOYER HEALTH CARE MANDATE DELUSION

There’s a common delusion making the rounds of Congress and The New York Times that says we must force employers to pay more of their employees’ health insurance costs in order to reduce the workers’ financial burdens. The problem is that employer insurance payments are simply one component of total employee compensation. Arbitrarily increasing this part will necessarily cut the funds available for wages and salaries. Mandating such behavior would constitute nothing less than an enforced reduction in worker pay for a government-favored use, i.e., to support a wasteful, inflationary, mediocre-quality medical system. Any way you cut it, the employer mandate burden would be borne squarely by America’s workers under the disingenuous guise of employer responsibility. Every reputable economist knows this. So do our cynical, dissembling members of Congress.

They would have us believe that the modern philosopher’s stone called legislation will magically make one plus one equal three. That’s the essence of the two Senate health reform bills and the House’s own 2000-page orgy of excess (HR-3962) that would exact penalties from employers that don’t provide enough health insurance.

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