The Problems with Job-Based Insurance

January 5, 2023

By Mark Wrede

News Feed/Stories

With our inordinately high costs of health care and persistent gaps and inequities in access, many hope that 2023 is going to be the year that we finally start to enact and implement health care justice for all. Remarkably, however, there is still resistance to the tested and proven concept that will get us there: single payer Medicare for All. Some argue that Medicare has too many defects, but we know what they are and can revise the program to meet widely accepted standards of care. Other nations have shown that to achieve the goals of equity, accessibility, and affordability for all, the government must have a central role.

To those who advocate for reliance on a private sector strategy, we point to its clear failings. Our health system failings reflect the shift of health care funds from patient care to wealthy investors, such as through public fund privatization (eg Medicare Advantage and Medicaid managed care) and the massive acquisition of providers by private equity. That’s why we must pay for health care through public insurance on the model of traditional Medicare.

Employers and insurer organizations tout the benefits of employer-sponsored health insurance. Admittedly, these plans provide a welcome financial backstop for expensive medical problems, such as a heart attack or a fracture requiring surgery. Unsurprisingly, workers value getting health benefits with a significant employer contribution. Yet most job-based plans have large deductibles (thousands of dollars) and provider networks are limited. This mixed picture is evident in the Commonwealth poll and reports by the Kaiser Family Foundation and others.

The Chamber of Commerce poll and report grossly exaggerate the level of support for job-based coverage. It’s biased, in four ways (please excuse geek detour):

1) Biased sample of respondents: it’s an online survey, with no sampling frame or response rate specified. This is a red flag for self-selection: the individuals who see and participate in the poll have a special perspective. The report doesn’t indicate the recruitment message, but if it was something like “What do you like about your health insurance?” or “Do you appreciate your health benefits?”, who do you think would click over to the survey?

2) Biased presentation: Statistics are presented in a way that favors the pro-benefits view. E.g., 52% do NOT strongly agree that insurance is affordable, and a similar % do NOT say that it’s high quality. More than 70% do NOT say it’s comprehensive or convenient.

3) Unfair comparison with public insurance like single payer. Respondents are asked if they prefer private work-based coverage or “government insurance”. No hint at what that means – is it Medicaid? The responses would be quite different if phrased fairly, e.g., “an improved Medicare for All, with coverage for all medical needs; no premiums, deductibles, or copays; and increased taxes only if you earn >$250,000”.

4) Omission. They don’t ask if workers are pleased that employer contributions to health benefits come out of wage or salary levels. (They do, to a very large degree.)

Polling as advocacy isn’t real information. Ok geek mode off.

Single payer would enable access to the entire health care system whenever needed. In contrast, employer insurance depends, first of all, on employment status and employer benefit plans. Second, details of the insurance contract matter: there may not be freedom to choose health care providers,  hospitals, pharmacies, or even what care is covered. Workers may fall prey to job lock, required to stay in a job because insurance may not be available if they quit. Voluntary and highly varied job-based insurance guarantees that coverage is inequitable and unreliable, in contrast to the equity and universality of single payer.

It is understandable how, through the years, individuals have liked employer sponsored plans, since they have been among the better options to provider, under the right circumstances, heath care for workers and for their families. (Less true these days due to the skyrocketing deductibles, and obscuring the lower wage effect.)

Also, taking solace in decent job-based insurance undermines a principle that most of us care about: solidarity. Most of us really would like to see health care for everyone.

Not long ago, we experimented on a large scale with trying to fix the private insurance approach. The Affordable Care Act aimed to preserve, improve, and expand employer sponsored insurance as a pillar of our health care coverage, filling in the voids with a regulated market for private insurance and more Medicaid. The ACA seemed to enhance solidarity while preserving employment sponsored plans.

The problem, as reviewed well recently, is that this experiment in health policy was a dismal failure in providing decent coverage for everyone, and thus a failure in the solidarity we seek. Tens of millions remain uninsured, and under-insurance exploded with the rapid growth of high deductible plans. If solidarity is building, it’s of the wrong variety: shared pain.

Other nations provide us with ample highly successful examples of single payer. They are effective in providing affordable care for everyone and thus also fulfill the goal of solidarity. We really can have high performance universal health care, and save money in the process. A single payer system would guarantee better health care choices than in employer sponsored plans, for workers and for everyone.

We have the opportunity to reject the current, fragmented, dysfunctional employer-sponsored system and adopt policies of social solidarity that would bring affordable, comprehensive high quality health care to everyone.

Look around you. This really seems to be the year to fix the health care financing system in the United States. We can use our ingenuity to create a uniquely American system of social and economic justice.

Let’s do it. In solidarity, single payer for all!