Many thanks to Joe Paduda at Managed Care Matters, who hosted a fantastic Health Wonk Review this week. I really encourage you to take the time to read it yourself (don’t try to multitask through this one). That is where I found this article…
For many years in America, health insurance and employers have gone together like peanut butter and jelly. It’s likely that you get your health insurance from your employer – almost certainly so if you work for a large company. But if you work for a smaller company, there’s a decent chance that your employer doesn’t offer health insurance as an employee benefit. Beth Capell from Health Access Weblog has written an insightful article about mandating coverage for employees, and has analyzed the economic implications of doing so. She does an excellent job of refuting the argument that mandating employee health insurance benefits is not a job killer, nor is it likely to hinder the economy – much the same way that raising the minimum wage does not adversely impact the economy or employment numbers.
I’d like to take this idea a little further. First of all, while Obama’s plan is widely reputed to include a requirement that businesses provide health insurance for their workers, it’s only large employers that would be bound by this requirement – and nearly all of them provide health insurance benefits already. Small businesses – where a good number of America’s uninsureds work – would not be required to provide health insurance benefits. But there are a couple of items in Obama’s health care reform proposal that would help small businesses be able to afford health insurance. He’s calling for a Small Business Health Tax Credit and for a government program to cover a portion of employees’ catastrophic claims. Both of these should serve to make health insurance more affordable for small businesses.
But what about a mandate that all employers provide health insurance for their employees? I’m very much in favor of any plan that decreases the number of people living without health insurance, even for one day. But I can see how paying for health insurance can be a very tough undertaking for businesses with only a few employees. Without regulation regarding the quality of plans, I would be concerned that employers might seek out the least expensive policies available. The result would be that people would feel confident that they “have insurance” but would fine themselves vulnerable in the event of a serious health problem.
While employer-based health insurance is still the norm in this country, it’s not necessarily the best way to provide health insurance. As long as each employer can pick and choose from among hundreds of policies, there will still be a huge disparity in what sort of coverage people have access to, depending on where they work. And “providing coverage” can range from an employer that covers the entire premium for employees and their dependents on a very comprehensive policy, to an employer that provides a bare-bones policy and pays the state-required minimum contribution on just the employee’s premium (leaving the employee to cover the rest of the premium plus any dependents’ premiums with payroll deduction).
John McCain would like to see us move away from employer-sponsored health insurance and send more Americans into the individual health insurance market, with tax credits that can be used to purchase individual health insurance. I just can’t see this working, simply because there are just too many people who would not be able to get through the medical underwriting that individual health insurance carriers use. The best aspect of group health insurance is that it’s guaranteed issue. And that’s not something we should throw away without a lot of careful consideration. But if we move towards a mandate that all employers offer health insurance to their employees, we need to make sure that there are regulations in place to set minimum coverage requirements and employer contribution levels (because what good is a $975/month family policy to a person who earns $2000/month if he has to pay $750 of the premiums himself?). And we also need to take steps to make small group health insurance premiums more affordable. Health insurance tax credits and government reinsurance programs that kick in once claims reach a certain level are a very good start. Colorado has attempted to bring a measure of fairness to the small group health insurance market starting in January, with House Bill 1355, which eliminated health-based ratings on premiums. But although the bill had its heart in the right place (fairness with regard to health insurance premiums), it’s looking like the result is going to be higher premiums for most small businesses in Colorado, since healthy groups will no longer qualify for discounted premiums. And without subsidies to help pay the higher premiums, it seems inevitable that some small businesses in Colorado will stop offering health insurance in 2009.
If our overall goal is increasing the insured population among employees of small businesses, I think the answer lies with the government covering some portion of the premiums or the claims, in addition to asking employers to take more responsibility for their employees’ health insurance.
