Why Health Insurance Should Not Be Tied to Employment
On our nation’s birthday, we have much to celebrate in the 238 years since our country was founded: we’ve come a long way with regards to religious freedom and equal rights but we still have a long way to go. This past week the US Supreme Court voted 5-4 that the government cannot require for-profit, closely held companies to provide certain birth control drugs and devices because the provision goes against the owner’s religious beliefs. Whether you agree or disagree with the Supreme Court ruling, this case never should have been entertained by the high court because health insurance should not be tied to employment, and here are the three reasons why:
Tying Health Insurance to Employment is Inequitable
Most people don’t know that prior to WWII, health insurance was not tied to employment. In response to wage control mandates, the US Congress acted to create “fringe benefits” which introduced the whole employer-provided health insurance system we have in place today. For decades, employers provided and paid for health insurance for the employee and his/her family but as healthcare costs rose, many employers (mostly small businesses) couldn’t afford to provide this benefit so they either switched to lower cost plans like HMO’s, limited the paid coverage to the employee, or simply offered a policy for which the employee could pay for. Well capitalized companies and those with unionized workers tended to pay – and still do – for employee health insurance and often the family coverage which is a significant benefit especially as it relates to our tax code.
Our tax code does not recognize employer paid healthcare costs as taxable compensation which is unfair to those who purchase health insurance on the open market with after tax dollars. In other words, health insurance costs more for those who don’t obtain health insurance through an employer. Estimates vary but approximately 55-60% of the population receives health insurance through employers and, of course, they don’t want the system to change because it works to their benefit but why should employees get free, subsidized, or tax-free health insurance while another group has to use after tax dollars to buy health insurance? Some critics claim that economically, the situation should be reversed with the self-employed and unemployed provided health insurance without a taxable consequence but that option is also unfair.
The tax code should be applied equally to all which means our country should have a healthcare insurance system in place in which the government defines a basic insurance coverage that everyone (except those in Medicaid, Medicare and other entitlement programs) is required to purchase from private insurers. This solves some of the tax benefit inequity and does several other things. First, requiring citizens/residents to buy health insurance helps ensure they are not a burden to other taxpayers. Second, a basic health insurance plan takes religion out of the question except on the personal level. If a woman doesn’t want to use birth control because of religious beliefs, the decision is hers to make but neither she nor anyone else has the right to tell another woman she can’t have access to birth control or devices because it goes against the religious beliefs of an employer. Part of religious freedom is not imposing beliefs on others.
In Switzerland, private insurance companies provide basic health insurance policies but are prohibited from making a profit off the policies. They make their money on the supplemental policies that most people buy for additional coverage and benefits. Switzerland also rebates money back to any citizen whose health insurance and healthcare costs exceed a percentage (approximately 10%) of their income which makes the system more equitable.
Employers Should Not Be Involved in Personal Healthcare
Having employers provide health insurance forces them into the role of big brother which has no place in personal healthcare. Over the past decade, significant press coverage has been given to obesity, lifestyle choices, and religious beliefs relating to personal healthcare. Many of these issues have caused employers to pressure employees to reveal personal medical histories, adopt healthcare screenings, enroll in fitness programs; and deny women access to birth control medication or devices, such as the most recent Hobby Lobby case in front of the Supreme Court where the company declined to offer four types of birth control to their employees based on the religious beliefs of the owner of the company.
That someone’s personal religious beliefs trump the personal healthcare rights of another is disgraceful. Personal healthcare is between the patient, the doctor, and the insurance company and to go one step further: no employer has a right to any woman’s reproductive decisions. If employers were not in the position of providing health insurance, this wouldn’t be an issue.
Tying Health Insurance to Employment is Inefficient
Most companies are in the business of producing a product or providing a service. Having employers provide health insurance is costly in terms of time and staff. For smaller companies, the burden is usually on the owner and for larger companies, dedicated human resource staff are allocated to this function. Then consider the amount of time our government employees have to spend on this issue because everyone disagrees about what type of coverage companies should provide. There is Congress, the Senate, and the Judiciary whose time could be spent wisely on other issues instead of settling disputes between all the various parties who pull the religious and personal freedom card while denying those very same freedoms to those who don’t subscribe to their views.
Health insurance and the parameters are difficult enough without including employers who participate in an inequitable system, try to gain a seat at the table where healthcare decisions should be left to three people: the patient, the doctor, and the health insurance representative, and have to allocate resources that could be better used in their primary mission: to make products or provide services in the marketplace.