Friday, January 9, 2009

why tie health insurance to a job?

More on the same question in the WSJ-- in an essay by Ezekiel Emanuel (at the NIH) and Senator Ron Wyden (D-OR)...

They open with a useful and important discussion of the history-- on the subsidy of health care insurance through the firm.

Why do millions of Americans get their health care through an employer-based system from the 1940s?

...It was a way of circumventing the World War II wage and price controls. Barred from offering higher salaries to attract workers, employers offered health insurance instead. Aided by an IRS ruling that said workers who received health benefits did not have to pay income taxes on them, and by the fact that employers could write off the cost of the health benefits as a business related expense, this accidental arrangement became the primary way most Americans access health care.

That was then; this is now...

The system worked at first, but a lot has changed in 60 years....Today, lifetime employment is dead. By 42, the average American will change jobs 11 times....

Workers are the ones paying for this waste. The money that employers are spending to buy health care for their employees could otherwise go to workers in the form of higher wages, empowering individuals to make their own health-care choices.

2 Comments:

At January 9, 2009 at 1:14 PM , Blogger William Lang said...

This is exactly the problem with health care. It is hurting corporations as much as individuals (e.g., GM being responsible for the health care of a million workers/former workers). Whatever reforms are adopted should enable all individuals to obtain coverage at a fair price (a price they can afford).

 
At January 9, 2009 at 1:29 PM , Blogger Eric Schansberg said...

Agreed, but I wouldn't use GM as the example. They fit, but they have considerable baggage with unions, pensions, etc.-- that go far beyond the health care problems we face.

 

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