Tuesday, July 01, 2008

Employers Crossing The Line With Health Insurance?

Do you know why most Americans get their health insurance from their employers? It's a historical fluke.

You see, back in the days of the Great Depression and World War II, budding socialist President Roosevelt instituted wage and price controls. If companies wanted to attract the best employees, they couldn't just offer more money, so they had to get creative. They could offer non-financial perks, and health insurance was one such perk. Shipbuilder Henry Kaiser was a pioneer in this field, and he's not known for shipbuilding today.

Eventually, it became standard for employers to offer some form of health insurance. Laws were passed, mandating certain requirements for employers who provide health insurance to employees.

And today, many people agree the system is broken. I won't go that far, but it's certainly not ideal.

Why, in this day and age, should employers be the source of health insurance? Because it's expensive, and we need it? Gas, housing, and food are expensive, too, and I need each of them more immediately than I need health insurance, but I don't expect my employer to provide me with any of them. In fact, it would seem silly to expect my employer to provide any of those. But health insurance? That's almost a requirement.

It's not surprising, then, with our health care industry operated the way it is (with entirely too much government intrusion, I might add), that prices are out of control. What's the "solution"?

To some, it's a single payer (government) system, like the failing systems of the UK or Canada. Of course, government intervention in WWII got us into this predicament in the first place! Why would we expect government to be able to solve this?

It's not politically feasible for companies to stop providing health insurance for employees--it's seen almost as an entitlement. So what can companies do to lower costs?

They might try to force you to be healthy.

Some people, however, bristle at what they perceive as having lifestyle choices dictated by an employer.

This May, for example, the University of Massachusetts Medical School banned all tobacco use from their campus and hospital, including parking lots. If an employee is caught smoking, they risk being fired.

"They won't even allow people to smoke in their cars," says James LeBlanc, 45, an employee at the university and himself an ex-smoker who kicked the habit prior to the ban. "We all know smoking is bad for you, but last time I checked it was still legal in this country."

Some companies forbid their employees to light up at all -- even at home. There are at least 20 states that allow for this type of work policy, including Ohio, where the state's second-largest employer, the Cleveland Clinic, stopped hiring smokers in September.

Smokers aren't (yet) a protected class like women, minorities, or homosexuals, so perhaps companies are free to discriminate against them all they want. They'd have much less of a leg to stand on, though, if they weren't footing the bill for health insurance.

I call for a wall of separation between employer and health insurance. And a libertarian philosophy that doesn't have one group of grown adults telling another group of grown adults what they can and can't do on their own time.


Robert said...

I found your blog posting by chance as I search the web for 'local history' entries and saw an tag for 'socialism', which led me to this blog about healthcare and insurance. I was amused by your reference to the UK's 'failing system' by which I assume you mean the NHS? For a start it is not 'a single payer system' and it is run independently in England, Scotland, Wales and Northern Ireland. It is also far from 'failing' as anyone who makes use of the NHS knows. The private sector is involved (much against the wishes of many, including myself). It is something we pay for through our National Insurance (NI)'tax' and is free at point of need. Its admin overheads make up around 5% of its costs.

Employers also make an NI contribution on behalf of their employees. The NHS can best be described as 'selfish mutualism' which is to the advantage of everyone, including employers.

Good employers are concerned that their employees are decently housed and have sufficient income to pay their bills. Of course there is conflict between capital and labour and the latter is the most important asset any society has — including America.

I enjoy a little rant myself every now and again, but, as a Socialist, a business owner and a local historian, I have an optimistic take on life and the world in general. People, including bosses, are, for the most part, decent people which is why they happily pay NI in the UK for free at point of use healthcare. It's a sad society which condemns the less fortunate and vulnerable to live in fear of ill-health.

I will be back to read your blog again. It's nice to have one's take on life challenged, especially when they are reinforced by the encounter!

Darren said...

While I'm glad you yourself enjoy socialism and the NHS, I wouldn't give a plugged nickel for either one. Give me a free market any day, and the freedom to choose.

Granted, we don't have much of a free market in health care in the US, either, but in my dream world we would. I would *not* want anything approximating your NHS.

rightwingprof said...

I have a friend who relied on her employer for her health insurance. She lost her employment, and health insurance, when the employer went under. Unfortunately, she was diagnosed with MS while uninsured. Had she taken responsibility for her life and insured herself, she would not be in the predicament she is today.

Ellen K said...

But there is a problem out here. Because of the additional layers of bureaucracy created by the HMO/PPO phenomenon, pricing of insurance has risen far more than the standard of living. One of the most critical and obvious areas are students who have graduated, but who don't yet work in jobs where insurance is a perq. While it's hard to pay $400 per month for a family of five, it's certainly more workable on a per person basis than paying $160 for a single person. And that is what we pay as a family of five and what my daughter must pay as a single worker. Her employer doesn't take up slack and sadly, the quality of care and the slim choice of practitioners make it hard to find suitable treatment. While I am opposed to single payer or a national health insurance mandate due to the potential for yet more layers of bureaucrats, there does need to be some stopgap for those who are getting on their feet. We do this for children right now, but we need to have some sliding fee scale for adults as well.

Darren said...

Let's not forget that 20 years ago, HMO's were touted by our political so-called leaders as the cure to all the problems in health care!

Season said...

Thanks for writing this.

Darren said...

You're quite welcome. I hope you come back and read more.