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Let’s scrap employer-based health care

Marketplace Staff Oct 3, 2007

Let’s scrap employer-based health care

Marketplace Staff Oct 3, 2007


KAI RYSSDAL: President Bush uncapped his veto pen today, for only the fourth time since he took office — on a bill that has broad support in Congress, too. Unless House Democrats can swing some Republicans to vote their way, the State Children’s Health Insurance Program, or S-CHIP, won’t be getting any bigger this year.

Health Care is the biggest domestic issue in the 2008 presidential race. Everybody’s feeling the pinch, even enormous companies. General Motors, for example, just unloaded billions of dollars in healthcare obligations.

Commentator Robert Reich thinks GM’s a fine example for the rest of the country:

ROBERT REICH: GM isn’t the only big company to stop insuring the health of its employees — according to a recent survey by the Kaiser Family Foundation, the portion of firms offering health benefits has dropped from 69 to 60 percent in just seven years.

Even among workers who still get them, benefits are getting stingier. Last year, 38 percent of workers had to pay deductibles of $500 or more. Meanwhile, co-payments and premiums are soaring. In other words, the whole system of employer-based health care is unraveling.

Why? Because in an ever-more-competitive global economy, companies can’t afford its rising costs, and their shareholders don’t want to face its increasing risks and uncertainties.

Even for workers, the employer-based system makes less and less sense. These days, most people move from job to job, which means they lose coverage between jobs — when they and their families are especially strapped. And a growing number aren’t tied to a particular employer at all.

I say, let’s just scrap the employer-based system altogether. Use the $200 billion or so of annual tax deductions the system now relies on for employers and employees to help lower-income Americans — who aren’t poor enough to qualify for Medicaid — afford basic health insurance.

And then allow anybody who wants to reduce their health-insurance costs to join them — along with retirees, government workers and the poor, all of whom are already in government plans — in a “SuperMedicare” plan that would have so many members it could negotiate with drug companies, suppliers and hospitals for bargain-basement rates.

It’s a win-win-win. Employers no longer pay rising health-care costs. Employees get affordable health insurance even when they’re between jobs or have no steady employer. Nobody loses any options they now have.

The only losers are the big insurance companies, hospital chains, and drug companies. Seems like a small price to pay, doesn’t it?

RYSSDAL: The latest book from former Labor Secretary Robert Reich is called SuperCapitalism.

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