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It’s Time to Uncouple Health Insurance from Employment
It’s a little-known fact in the great outside world — although probably widely known among Ricochet readers — that employer-paid health insurance is an artifact of the Roosevelt administration.
When employers were prevented by law from raising their employees’ salaries, they compensated by offering benefits, such as health insurance, to make it more desirable to stay on as employees.
Fast forward seven decades, during which the common practice went from lifetime employment with one company to a more free-flowing job-hopping style, when both employers and employees were more likely to look at other opportunities in the market. And now, taking that to the next logical step, the “gig economy” — independent contractors not beholden or dependent on any one company — is growing around the world.
Most of the evidence of the growth of free-lancing is anecdotal because it’s hard to get firm measurements. In 2016, CNBC estimated that the number of independent contractors had grown by 27 percent more than payroll employees over the last two decades. The McKinsey Global Institute interviewed 8,000 people in the United States and Europe and reported that “up to 162 million people in Europe and the United States — or 20 to 30 percent of the working-age population — engage in some form of independent work.” That includes people who like to work solo, those who do a side hustle for extra money, those who would prefer a regular paycheck, and those who are doing independent work to scrape by. But if you’ve ever spent a morning in Starbucks, you know that a lot of people are keeping office hours there.
So when people talk about generals fighting the last war, they’re also talking about Congress making laws about health insurance. They’re making rules to maintain a status quo that’s going the way of the buggy whip.
On top of that comes a disturbing report from PJ Media this morning: This Secret Obamacare ‘Replacement’ Lets Your Boss Invade Your Privacy AND Gut Your Paycheck. H.R. 1313, Preserving Employee Wellness Programs Act, allows employers to coerce employees into “wellness” programs (that don’t even have any record of success) and dock their paychecks if they don’t comply. It also gives employers intrusive authority to look into employees’ health records, including genetic testing. (If you wonder why the gig economy is growing, this kind of behavior is part of the reason.)
But let’s just stipulate that not all employers are fascists. Why are the bad ones given such control over employees’ lives? By Republicans?
It’s time to put a stop to it.
- Count employer-paid health insurance as a paid benefit for tax purposes
- If you allow tax deductions for health insurance, allow them for all health insurance, whether paid by the employer or paid by the individual.
- Allow all employees to choose from the entire universe of health insurance — across state lines and outside their employer’s offering — if they want to.
- Make current laws protecting employee genetic-testing and health-screening privacy apply to insurance companies and employers.
Not everybody wants to participate in the gig economy. Many, maybe most, people want the security and teamwork of working for a company, at least for now, particularly while the health-insurance deck is stacked against self-employed workers. Let people make up their own minds.
But freelancers provide valuable services — they write books, drive cars, provide skills, craftsmanship and expertise, and too many other services to name. They take the risk to do something unique and specific. Small businesses find freelancers to be a boon in not having to pay for more employee hours than they need. Freelancers get to set their hours and priorities.
Small business is the biggest source of growth in our economy — the Small Business Administration says, “Since 1995, small businesses have generated 64 percent of new jobs, and paid 44 percent of the total United States private payroll” (Houston Chronicle) — and microbusinesses, one-person shops, and solopreneurs provide valuable support to those small businesses.
Last I checked, Roosevelt was out of office, and the Internet has upended a lot of our expectations about business. Get the US government out of the way and stop large corporations from treating their employees like private property, so that we can have a robust economy and the kind of freedom we were promised when this nation was founded.
UPDATE: As @Chuck Enfield pointed out, H.R. 1313 gives employers the right demand genetic testing and health screenings from employees as part of “workplace wellness programs.” This ought, it seems to me, to be against the privacy policies of HIPAA, but apparently it’s not.
It is against a 2008 genetic law that “prohibits a group health plan (the kind most employers have) from asking, let alone requiring, someone to undergo a genetic test. It also prohibits requiring such tests for ‘underwriting purposes,’ which include basing health insurance deductibles, rebates, rewards, or other financial incentives on completing a health risk assessment or health screenings” (Tyler O’Neil, on PJ Media).
I’ve revised the article for accuracy.
Published in Healthcare
The advantages of decoupling healthcare from employment add up when you think about it:
There are probably lots more.
Something I may have missed, maybe one of y’all didn’t? CBO and those opposed to any efforts to undo Obamacare say, “Oh! Oh! Republicare is gonna make 24 million folks uninsured!” While waving their hands in the air and running in circles.
Anybody know how that would compare with pre-Obamacare? Or how many of those 24 million only have insurance because Obamacare forced them to get it?
Never mind – NYT to the rescue: There will actually be fewer uninsured post Republicare than pre Obamacare
Wait a minute. Our employers are not just providing health insurance, they are subjecting us to healthcare pre-purchased by insurance companies. They make deals on our behalf and when costs rise, they pass those costs on to us, the employees, in the form of higher co-pays, higher deductibles and a more limited provider base. We have zero say in these negotiations – it’s a take it or leave it proposition. We must break this barrier. Insurance companies are smart and can find other vehicles for marketing group plans; they can market nationally recognized programs through alumni associations, civic organizations, fraternal organizations, churches, clubs. There is no reason why these kinds of group plans cannot have an open enrollment period annually. In exchange for this beneficence, let them organize as not-for profits and participate in state high risk pool reinsurance programs.
I’ve suggested that states set objective criteria for determining a high risk pool entrant. The pool could act as a re-insurance backstop for the costs of risks of those in the pool. Every insurer writing health policies in the state could be assessed a ratable portion of that pooled risk annually, even the state to the extent that Medicaid recipients participate in the pool.
The penalty for being uninsured is the financial responsibility for the care tab, not a government penalty/tax.
I still submit that market forces will never work until people must purchase their own care, backstopped by insurance, and until the prices for health care become as transparent as the cost of groceries. We need to be able to shop for care, not be absolutely shocked by the cost of care long since delivered.
I’m lost here because this post sounds like the author is framing the issue as a conservative way to repeal part of the New Deal–which is laughable. Also, it’s a policy preference that seems to have more to do with tax reform than healthcare reform. It’s more about taxing people than it is about their healthcare. We are being asked to support tax hikes.
Here’s a better idea for gubmint: repeal the ACA; deregulate the insurance markets; keep its paws off our pay checks; stay out of our doctors’s offices with its interminable forms. Spend and waste less.
There is a tax issue here about the fairness of cuurent tax law with respect to employer provided healthcare. And politicians can have fun trying to convince voters to support raising their own taxes.
First principles, people. Let’s stop using the terms Health Insurance and Health Care as synonyms. A lot of problems with the current system stem from that.
I don’t think these issues will ever be solved as long as people with preexisting conditions who lack coverage remain in the private market. These folks need medical care but they are uninsurable by definition. That means that the government and/or private charities will be involved in providing them with medical care. The important thing to do is to avoid distorting the private insurance markets with patients who have preexisting conditions for which they can’t be insured. Next, we have to limit the cost to the government for that care. Last, we need to make sure all future citizens buy some kind of healthcare so that taxpayers don’t get stuck with the bill. It implies a mandate but one that gives people choice. Otherwise, we will have another generation of people with preexisting conditions who are uninsured.
Then again, here’s another view of individual mandate.
HAHAHAHAAAHAHAHAHAHAHAHAHAHAHAHAHAHHAHA
We should just go to singe payer / socialized medicine and be done with it. It is where we are going to end up with anyway. All that is happening now is the GOP and the Democrats are determining which of their cronies will make money off it at the expense of the taxpayer.