15 October 2017

The Health Insurance / Care Morass

A several weeks old issue of the New Yorker has been sitting on my desk, folded open to a page from an essay by Atul Gawande titled Is Health Care A Right? because I keep re-reading one paragraph:

The reason [that health care is so broken] goes back to a seemingly innocuous decision made during the Second World War, when a huge part of the workforce was sent off to fight. To keep labor costs from skyrocketing, the Roosevelt Administration imposed a wage freeze. Employers and unions wanted some flexibility, in order to attract desired employees, so the Administration permitted increases in health-insurance benefits, and made them tax-exempt. It didn’t seem a big thing. But, ever since, we’ve been trying to figure out how to cover the vast portion of the country that doesn’t have employer-provided health insurance: low-wage workers, children, retirees, the unemployed, small-business owners, the self-employed, the disabled. We’ve had to stitch together different rules and systems for each of these categories, and the result is an unholy, expensive mess that leaves millions unprotected.

Employer-provided health insurance is the problem.

If you have employer-provided insurance, do you know what the premium is? Not the premium you pay, that gets deducted from your check, but the underlying premium that often an employer splits with you. Or doesn't. My employer pays 100% of the premium for the individual employee - but if the employee has a spouse and/or children to add onto the plan, the employee pays that difference. That's a good chunk of change.

Right now our rates are:

Each employee gets the same benefit from the organization - an untaxed benefit of almost $700 per month.

What if it were different, and the organization paid 80% of the premium no matter what spouse/children were covered? The rates would look like this:

In this iteration, the single employee pays something, and the employee with any dependents pays a lot less than in the first version. On the other hand, the employer pays a lot more for an employee with a family.

[I lay these numbers out, because it seems to me that a lot of people don't realize that the $xx per pay period that's coming out of their paycheck is not 100% of the premium.]

Which is fair?  Consider it this way. If your employer coughs up $1600 a month for an employee with a whole family on the plan, isn't that shorting the single employee for whom the employer is only paying $560? Would it be fair for an employer chose to hire the single employee over the married with children one, because the cost to the employer is lower? Of course not - and it's probably discriminatory.

I don't know what the solution is, but I firmly believe that health insurance ought to be severed from employment. You're a person, your kid is a person, your mother is a person - all of the people should be provided for. How that happens, I don't know. But the patchwork we've got going on - where some people are on Medicare, and others covered by employers, and others elsewhere - is not cutting it.

Consider this: when you are on Medicare, Medicare is only covering you. Not you and your spouse, and certainly not you and your children. Just you. Your spouse has his/her own plan. Doesn't that make more sense? Each person on their own plan - a baseline provided by the government and the choice to buy-up via a wraparound plan. Each to his own.

How do we get there?


Bibliomama said...

I wish I knew. I wish more people WANTED you to get there. Sigh.