HealthCommentary

Exploring Human Potential

When Employers Stop Drinking the Kool-Aid.

Posted on | December 5, 2018 | No Comments

Mike Magee

I recently sat down to lunch with a retired veteran health insurance exec and asked her, “Are there still large corporation CEO’s who want to be the providers of health insurance for their employees – and if so, why?” She replied that there were a few and the primary reason was “ego.” She says the few still believe they can do it better and fear encroachment of public funding on private enterprise.

But increasingly, employers are coming to appreciate the value of a single payer/multi-plan health system for themselves, their workers and economic fairness and opportunity for our society.

A few facts help flesh out their reasoning:

1. It now costs more than $10,000 to insure an employee, and $20,000+ for a family – 50%+ more than in other countries.

2. Employers and their insurance partners over the past three decades have employed a wide range of strategies to limit cost inflation – and none have worked.

3. One-fourth of the U.S. health expenditure is devoted to marketing, administration, billing and collections. Single payer/multi-plan methodology would slice off 10% to 15% of the cost.

4. Cost is closing in on $4 trillion a year. (By comparison, the U.S. spends $867 billion on defense and $1.1 trillion on education.)

5. Employer based insurance has been around for over 50 years and now covers 150 million Americans.

6. Employer based insurance exacerbates income disparity. For families living above 400% of poverty level, 83% have employer based insurance. For those with income between 100% and 250% of poverty, flip the numbers – only 38% have employer based plans.

7. Employer based plans skew risk (tending to insure the wealthy healthy) and in doing so raise the cost of insurance for the poor. The numbers reveal as much. Employers cover 1/2 the population but pay only 1/3 of the national bill for health care.

8. Tax policy enables this discriminatory system. The higher your tax bracket, the larger the government subsidy.

For years, employers have drunk the Kool-Aid. But in the era of Trump, we are rapidly approaching a “come to Jesus moment.” The truth is about to set us free. And the truth is, we’ve been suckered for over a half century into a flawed and corrupt system, and we could do much, much better.

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