Wednesday, July 13, 2011

The Problem With Employer-Based Health Care

I had an interesting conversation today with a co-worker who was complaining about her health insurance bills. She is 60 and fairly healthy, but we work at a small company that does not provide health care benefits. She and her husband make about $60,000 per year combined, too much to qualify for Massachusetts' subsidized health care plan. She told me that her premium for her private health care plan had just risen to over $500 per month. Her husband is 65 and on Medicare, but he has a number of health problems and Medicare does not cover all his medications, so he has to purchase supplementary insurance.

I explained that in order for Medicare to cover more things, everyone would be forced to pay a lot more money in Medicare taxes for things that they might not need, and that wouldn't be fair. She seemed to understand that. But I had no answer for her problem of being "squeezed in the middle," where she was not poor enough for a subsidized plan but not rich enough to be able to comfortably afford a private plan.

Generally, I am all for individual freedom. But health insurance doesn't work that way; it is often prohibitively expensive for individuals, and only affordable in group plans that can be provided either by medium-to-large corporations or by government. I am certainly wary of being dependent on government for health insurance. But is it any better to be dependent on large corporations? It seems to me that our current system penalizes anyone who does not work in a medium-to-large company by making it very difficult and expensive for them to get health insurance. It also seems to penalize the corporations themselves, since they compete in a global market with companies who do not need to provide health benefits for their workers.

ObamaCare is clearly not the solution, either. The individual mandate violates any reasonable interpretation of the U.S. Constitution; Congress can "regulate interstate commerce," but it cannot force people to engage in commerce. Also, ObamaCare only increases the costs to business with its new taxes and penalties for businesses that cannot afford to provide health insurance. But could we have a public option that would end the dependence on big companies without requiring massive tax increases? Two essential criteria would have to be met:

  1. The health care programs would have to be implemented at the state level, not the federal level. A federal health care program containing an individual mandate would almost certainly violate the U.S. Constitution as mentioned above. Huge federal bureaucracies are always extremely wasteful and inefficient. The existence of different health care programs would allow citizens to vote with their feet if one state's health care program became bloated and expensive (sort of like businesses are choosing to leave California). And finally, some states could decide not to have a public option at all.
  2. The programs would need to provide several accordingly priced levels of coverage, including one low-priced, basic plan (no chiropractic, no sex change operations, no substance abuse treatment, etc).
 I have to say that Massachusetts' public health care program was very useful when I was serving in AmeriCorps, and thus obviously had no employer-based health insurance. There are problems with costs that need to be addressed (tort reform would help lower medical costs overall), but I don't see why a similar program couldn't be implemented in other states.

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