The Decline of Employer-Paid Health Insurance

Whenever Europeans ask me about health care in the United States, I always have to set aside some time to explain that most (non-elderly, non-poor) Americans get health insurance through their employer. Europeans find this difficult to understand, because it seems so weird and arbitrary -- getting health insurance from the company that employs you makes just about as much sense as getting vaccinations from your plumber. Yet that's the way it works for many Americans. And it creates problems largely unknown in the rest of the industrialized world -- in particular, people stuck in jobs they don't like because they can't afford to lose their health insurance.

But, as Kevin Drum reports, the situation is changing fast:

Over the past decade, the number of Americans with employer-sponsored health insurance has dropped from about 70% down to nearly 50%. Note that this is for the non-elderly only, so it's not due to the aging of society or the growth of Medicare. This is working-age people only. As Krugman says, our weird employer-based health insurance scheme is "coming apart at the seams."

Most Americans simply have no clue how bizarre it is that we rely on employers to provide health insurance for most people. We've all grown up in this sytem, so it seems completely normal. But it's not. It happened through a weird combination of historical accidents, and it makes no sense. Why should an airplane manufacturer also be in the healthcare business? Why should you lose your health insurance if you get laid off? Why should your choice of doctor be limited by your employer's choice of insurance carrier? (And why should it change whenever your employer decides to change carriers?) Why should your boss be allowed to dock your paycheck if you don't get the medical "counseling" he deems necessary? (Yes, this is real. And it's rapidly making its way to a corporation near you.)

Comments

[Mike]

Both systems have their faults. In Canada you have to wait at least a year to see a specialist. Sometimes even longer. With The States you have to pay lots of money sometimes even with insurance from your employer but at least you get help right away.

[M. Möhling]

Ligia, let's sum up: you don't fight for "better public education and healthcare" for being in a "comfortable position" with all the terrible things that entails. Which, as you relate, boils down to you decidedly having a life. For which you profess a modest amount of shame. See, you accuse yourself of sloth by not doing what's right while it's perfectly understood that those who have quite a life aren't really that slothful after all. GWW: Sündenstolz.

Now, what about the others? They don't fight for what's right for being racist bigots. An elliptical interpretation of the above tells us by way of analogy and symmetry that they probably don't have that much of a live. As racist bigots are wont to anyway. So we have a perfumed message that exudes a subtle signal to other butterflies and ladybirds among the peers: you're well off; the others ...likely not so much. So we get to show compassion for those less fortunate. And we get to show off. In just two short paragraphs. And we get to profess some shame in public, which is becoming, while it's understood that the others ought to be ashamed of themselves, too--and that shame is for real, by golly.

Shows what higher education is good for, doesn't it? May I presume some liberal arts involved? So let's chalk one up for verbal skills. And let's presume that stream of unconsciousness to flow mellifluously all by itself, effortlessly. No agenda needed, no planing involved. At least none that we know of or liked to be told of. Now imagine all of mankind to be thus privileged, eventually. Wouldn't that poop the party, somehow? Our host once quoted S. Lipset writing on "Tories and socialists" that are "to be found in the same polity"--boils down to some sort of compassionate conservatism that knows quite well which side it's bread is buttered on. Monty Python might have labeled that line if social activism Progressive-regressive Middle Class Liberation Front. Actually, this is an upper class party, but middle class thinks it's got an invitation, too. Anyway, this is not overly political, it's all about having a good time.

[Ligia]

Good Point.

Thinking about the brazilian middle-class. they think that is very obvious that a good job has to be linked to a good private health insurance, that a good salary will make you able to pay a decent private education to your kids. (not University: you pay K-12 to get the best for free later on at the public universities, but that´s changing too.) and so on. But different to the U.S.: we still have a free public health care and public schools. It happens that you rarely can rely on their quality or even avaliabily.

My question is: Why not fight for better public education and healthcare? I´m wondering why I AM not doing it.In my case I am in the confortable position of saying : I don´t have time to doit, I have a kid, job, husband and household to take care, blablabla (shame on me)...

But maybe some middle-class americans think like the typical brazilan middle class. If I fight for the right of having good education and health care for everyone, my kids will hang around with people of lower social classes, that might steal their iPhones and Abercrombie & Fitch sweaters, introduce then to drugs, bla bla... And the public hospitals? they look so thrifty, no Flat-TV on my individual room, no cool vending machines in the waiting room,or good-looking friendly nurses, and hey! I want to schedule my C-Section according to the astrology and give birth to my child in a five-star-look-a-like-hotel!

[Mak]

@Norbert: The BKK goe back to the old times when your profession determined your health insurance: Either your company had a BKK or you were in the Innungskrankenkasse (as a craftsman), in the Techniker Krankenkasse (as a technician) or in the Kaufmännische Krankenkasse (as a white-collar worker), with the Allgemeine Ortskrankenkasse (AOK) as health fund of last resort. This all changed in the 1990s, when there was free choice of health funds for everyone. For more details see http://germanhealthlaw.wordpress.com/2012/02/16/23/

@orangeshow: Sure, health insurance is a benefit. That's how it became popular in the US: During WW2, wages were frozen. The only way for companies to pay their workers more was offering benefits. Nowadays, with an employers' market, companies don't have to offer such lavish benefits. But the costs of lacking health care are either borne by society as a whole (through taxes or lack of services) or by those too poor to care for themselves (as in the middle ages). This was no problem when healthcare was cheap (i.e. until the 1900s), but today medicine is better but also more expensive. It is also a question of the values of society: Do we accept that society has to protect the weak or are we content with the strong winning it all?

[Martin]

@orangeshow

That is why America dominates in almost every category of business.

I guess you are only talking about size. You are not talking about quality. And you are not talking about the impact a company has on society. I the US an employee has to fear his employer because he can cause so much damage to ones life.

Having insurances as part of employee benefits is nothing but taking employees hostage. If you earn in the millions you wouldn't care. But for the rest ...

There are so many ways to give benefits to employees - insurances really don't need to be part of this. And I really do believe that this crazy health care system of yours is a disadvantage for America.

Just compare the avarage cost of an appendectomy in a modern health care system with the average income of the lower middle class. No way such an income could be able to finance an adequate health insurance.

That everyone has to have health insurance in Germany is nothing but a benefit to Germany. It is just not part of your talks with your boss.
(BTW: We have a strongly competitive market of health insurance corporations - nothing to do with "socialism")

The assumption that everyone should be able to get good health care by just working hard enough is just delusional and expresses a social coldness I couldn't stand to live with.

Martin

[orangeshow]

Your assumptions are off base....companies such as aircraft manufacturers are not in the health care insurance business nor will they ever be. They purchase these services for their top employees as a way to attract the best talent. They also give bonuses, stock options, cars, life insurance, child care services, etc. All as a way to get good employees....it is a free market and the best companies are competing for the better people. You argument would also be similar to 'why should a company give a car to an employee and then be in the car insurance business.' Companies choose to give benefits in return for top production. People aren't stuck in jobs they hate for insurance, the American rate of job changing is quite high.

It all goes back to capitalism and the free market....benefits (health insurance, salary, bonuses, cars, car insurance, etc.) are designed to get top talent. That is why America dominates in almost every category of business.

[Norbert]

In Germany, there are similar institutions called Betriebskrankenkassen (BKK). They are health insurances of large employers and some exist since the 19th century. They used to play a much more important role than they do now, though. While at some point there were over 7,000 BKKs, only about 100 still exist today.

However, a difference to the US (if I understand the US system correctly) is that as an employee of a company with a BKK, you are free to choose whether you want to be insured with the BKK or with a different one. Plus, most BKK are now open for everyone, so not only to employees of the company.