Medical insurance, would you rather... ?

Parent Cafe
1

For medical insurance, would you rather:

a. Get it as a benefit through your employer
b. Get paid more so that you could buy your own

?

Assume that the extra pay in scenario (b) covers the cost of a similar plan to the employer plan in scenario (a), after accounting for taxation differences.

2

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3

Through employer. If you are paid more, you are taxed more. Also, an employer usually has a little more clout with the insurer is something goes wrong, if a payment is lost, if claim is mishandled. The employer deducts the premium and you don’t have to worry about it.

4

I don’t care, as long as I have insurance. But realistically, if they pay me, the odds of that payment keeping up with rising health insurance costs seem slim. It seems like a way for the company to wash their hands of dealing with that. Also, will they pay a person needing a family plan more than a single person?

5

It would be best if insurance were completely divorced from employment.

6

Under the current system, the insurance provided by larger employers is generally far superior to anything that is available on the individual market. So it’s a no-brainer. The employer provided insurance is generally preferable. Small companies might not have the same ability, though in my state the plans available on the ACA exchange for employers are better than the plans available to individuals – so even a small employer would provide better options.

As a matter of policy… LasMa is right. We would all be better off if insurance weren’t tied to employment. It’s a hassle for employers to manage, and it makes things unnecessarily complicated for employees when they switch jobs or get laid off-- especially a problem for employees who must change employment or stop working precisely because of ongoing health problems.

7

I agree withLasma…I wish health insurance was like car and property insurance…not tied to employment. People shouldn’t have to work for insurance. As many do. It needs to be affordable…but that’s a pipe dream. I wish we were lik Canada…govt sponsored, but you can’t buy supplemental policies. I think that’s how it works.

8

Switzerland also has a HC system worth looking at. Private insurance where the most you pay is 10% of your income. After that you are subsidized. Incentives where you can earn back premiums for taking steps to improve your health.

9

Selfish me loves my employer insurance. Altruistic me wants it severed from employment.

Tbs, employers obviously don’t want to sever health insurance from employment - because if they did it would already be severed. The business sector was, IMO, shockingly silent in the run up to ACA, as one would think it would be in their best interest to lobby for a plan which did away with employer provided insurance.

I’m sure once they collectively decide it’s time - it will be severed.

10

I don’t think employer insurance is so vastly superior any more. I buy insurance for D2 on the open market, and have my own through a COBRA extension from my ex’s employer (state government). They are pretty comparable in coverage, but her deductible is lower than mine!

11

Hands down: through the employer. The plans on the exchange are becoming increasingly difficult to navigate and PPO plans are more and more expensive. At least in my area, exchange purchased HMO plans are a NIGHTMARE.

I’m with the others, I WISH it was a fair and affordable marketplace so we could purchase our own.

12

I agree with Emily’s post

13

Through the employer. They pay the providers better hence there are more providers on their plans.

14

It probably depends upon what type of insurance your employer offers. Ours is old time union negotiated comprehensive insurance, and it is fantastic. I don’t know if this kind of insurance is available on the open market, and my company manages to pay a very decent price for it. I doubt I could get this deal elsewhere for any price.

I am not in support of preventing employers from providing health insurance, even if I didn’t have the insurance that I do. It really is none of my business if others have a better deal than I do, and it seems extremely intrusive for anyone to decide this for others. If they want to limit the tax deductibility of plans, fine. But it seems to me that we could offer decent health coverage to everyone as a baseline, without forcing everyone into the same system. This, “I wish we were like Canada…govt sponsored, but you can’t buy supplemental policies. I think that’s how it works,” makes zero sense to me. Disallowing people to buy supplemental policies? People and businesses should be able to spend their money how they want.

Honestly, I don’t understand the mentality of trying to force everyone to do the same thing. Why not just make decent health insurance available to everyone at an affordable rate (yes, propped up by the taxpayers).

15

I generally agree with you, busdriver, except for this:

The problem with that is that the more we slice and dice the population, the more expensive it gets for anyone who can’t get into a very low-risk pool. The only way to keep the cost of insurance manageable for everyone is to spread the risk as widely as possible. When we have a bunch of little sub-pools, we can’t do that.

16

A huge benefit of removing the employer connection would be cost reduction to employers. Think about that.

  1. Locally. One employer offers a subsidy, while another can't because the business doesn't have sufficient margins or demand for products/services is less. This means talent will tend to allocate to the companies that can afford to compete through health insurance subsidy, which isn't optimal. It also means companies have to put resources into paying for health insurance rather than into anything else, from R&D to training to more people, etc.
  2. Internationally. This is the one that gets me: don't people realize that companies in other countries can price goods and services without the cost of health insurance (or much less of the cost)? They have a cost advantage rooted in the way we dump health costs into employment. They generalize that - through a number of different systems - so the cost is spread and the companies can focus on their actual costs.
  3. Regionally. Your region has higher costs and companies tend to move to other regions where costs are lower. One of those costs is health insurance. Even if those costs were exactly the same in each region - and they're not - your company's margins can tilt enough to say "move" if they shrink to a certain level. (I'm explaining this one badly, I know.)
  4. The cost of HR or, in smaller companies, the cost of extra time/people/paperwork necessary to deal with insurance companies. This isn't productive work. Rather, it is if this is your job but it isn't directly productive to the generation of products and services. Add this in locally, regionally and internationally.

I think about this in light of the political arguments about the size of government and its “productivity” or “drag” on the economy. A huge drag is people employed and resources deployed to deal with insurance issues at the company level. (And a bigger drag is that we spend a very large percentage of premiums on marketing/administrative. My own number guess is that this remains well over 20%, which means over $200B a year. And in that number I’m not counting the billions upon billions spent at the company level. THAT is the real economic argument for single payer.) We hurt ourselves competitively with this dumb system.

17

^ But business obviously does not mind all the costs and the competitive disadvantage they incur providing health insurance to their employees, because if they did they would have been vigorously lobbying for a system which allowed them to stop covering their employees and we would have that other system, which shall remain nameless. And it would have passed in a bipartisan manner.

18

Big business (i.e. the ones with lobbying power) probably derive a competitive advantage in the labor market over small business in the offering of benefits like medical insurance to employees (since big business can often offer better plans at lower cost than small business).

19

C. LasMa’s answer.

20

Excellent, Lergnom.

Re #4 – it’s not just HR people who are bogged down doing insurance work. I’m an accountant, and I spend a good chunk of my time dealing with insurance issues. The annual meetings with the broker, the time spent sorting through the options and making decisions, the effort that goes into communicating with employees and dealing with questions and complaints, the spreadsheets and data entry for payroll adjustments, the constant monitoring to be sure we’re in compliance with various regulations, the budget dance, the back-and-forth with the carrier when we hire or terminate an employee or there are dependent changes, the tracking of carrier invoices and making sure all changes are made correctly, the payables involvement – NONE of this helps us to build a better widget and get it out to our customers.

American business has voluntarily slapped a ball and chain on its ankle, and refuses to give it up. Why? It makes no sense at all.