It’s Time to Uncouple the Link between Employment and Health Insurance in AmericaJuly 4, 2020
Millions of Americans have filed for unemployment claims in the last few months, which is a massive increase from the last year. This staggering unemployment rate is sure to cause enormous economic impact and these figures will have a direct impact on public health. Simply because the loss of jobs will also mean the loss of health insurance for many Americans who receive these benefits through their employer.
An increasing number of uninsured Americans are adding to the agony in the time of the global pandemic. In addition to that, even the Trump administration has indicated that it is not going to back off from its stand that the entirety of the Affordable Care Act is unconstitutional and the Act should be struck down.
The U.S. Supreme Court is going to hear the case later this year, though the legal arguments are weak still there is no assurance that the law will be sustained. The increase in the uninsured rate will have a devastating effect on both the individuals and the hospitals. The hospitals are going to witness soaring rates of uncompensated care because in the absence of health insurance hospitals will have to continue providing acute care without often getting paid for it.
There is no reason why health insurance should be tied to employment and why America is firm on the primacy of this model. It is a fact the nearly 60% of the Americans have job-based health insurance, it is a scary statistic that should worry all, especially during the rising unemployment figures. The majority of the Americans have a mind-set that health insurance is a privilege earned through employment rather than a fundamental right. If there is any attempt to change this mind-set have been met with intractable resistance.
Employment and Health Insurance
The job-based health insurance trend was not natural but it was meticulously cultivated by the insurance companies, who had their interest in mind. By offering health insurance to a group of employees or workers, the health insurers ensure that they would sell their health plans to a relatively healthy and young generation, which will keep their expenses low and their profit margins high.
Health insurance companies not only promoted their insurance products but also the thought that health insurance was an earned benefit, it is a responsibility that every household head should provide to his family. If any household head failed to have apt health insurance, then it was treated as a personal failure, rather than the failure of a society, who failed to take care of the vulnerable. The trend of job-based insurance began in the early 1930s and by the year 1960s, a majority of Americans received health insurance through their employers.
Due to the trend of job-based health insurance, many people were unable to obtain health insurance, especially the elderly, unemployed, people who were unable to work due to some reasons, and children. To efficiently address these sections of people, specific programs such as Medicare, Medicaid, and later the Children’s Health Insurance Program (CHIP) were developed. Still attempts to expand health insurance through different means other than employment were strongly objected.
Even with the coming of the Affordable Care Act that required states to expand Medicaid eligibility to low-income Americans were not happily received. Around 26 states sued the federal government to avoid this requirement, and many states that were initially were reluctant eventually chose to expand. Even as of now, 14 states have not expanded Medicaid, thereby leaving many low-income Americans uninsured. In addition to it, under Trump administration states have petitioned to add work requirements to Medicaid accessibility. This is going to be a harmful measure and it has recently been struck down in Michigan.
Who Pays for Health Insurance
Though employer-sponsored health insurance is popular in the U.S., it is expensive, inefficient, and favors people with high income. In 2019, the average cost of a job-based plan was over $20,000 per family. While much of this amount is paid by the employer and on average over a quarter of premiums are paid by employees along with the copays, deductibles, and other types of cost-sharing. It is essential to know that employers pay for their employees’ benefits at the expense of employees’ salaries and yet these benefits are not taxed. This is disproportionately benefiting people with high earnings, who come in higher tax brackets. Besides, in job-based insurance, there is little incentive for efficiency and cost-saving measures because high spending on health insurance is turned into higher premiums.
Job-based Insurance Favors Insurers
Employer-sponsored health insurance favors insurance companies and people who are in high paying jobs. This also has many other disadvantages like hindering innovation, promoting job-lock, and keeping salaries low. This health insurance option is also ill-suited for a widespread catastrophic like the COVID-19 pandemic. With the rising rates of unemployment and uninsured, it is time to rethink the relationship between job and insurance.
Opinions need to be changed and the health insurance industry should not be the primary shaper of public opinion on who deserves health insurance. Practicality creates new priorities and also shakes the yearlong political beliefs. The coronavirus pandemic should be considered as an opportunity to rethink about the over-dependence on employment as a gateway to healthcare and insurance. It is time to inculcate the belief in Americans that they can access healthcare regardless of their employment status.