Fixing The Great American Health Care Mistake
The Obama administration’s decision last week to delay a mandate for large employers to provide health insurance or pay a fine is both meaningless and significant.
It’s meaningless because it impacts such a small number of employers. Nearly all employers with more than 50 employees already provide health insurance. And those that do not, are unlikely to change course because of the penalty (even at $2,000 per full-time employee that costs far less than insurance).
But it’s significant because it highlights The Great American Health Care Mistake. This country should have never forged health care to work. It was an accident, a way to avoid wage controls during World War II. No other country in the world has such a crazy system. And it makes no sense to let our employers make decisions about our health care. All the basic stuff: What kind of coverage we buy, what should be covered, or even our provider networks and, therefore our doctors.
This mistake let Americans “pretend” that health insurance did not have a cost. It was a quiet part of our compensation, but because it’s not measured by the employee (although that will change soon), it wasn’t something we were willing to spend money on ourselves.
But employer-sponsored insurance is declining. It’s a trend that began before federal health care reform. The percentage of Americans who receive health insurance through employers dropped from 69.7 percent in 2000 to just 59.5 percent in 2011, according to a report by the Robert Wood Johnson Foundation.
And even when company insurance is offered, more employees are saying, “no thanks.” In 2000, 81.8 percent of employees who were offered coverage enrolled. A decade later, the Robert Wood Johnson Foundation study reported, only 76.3 percent did.
The reason for the decline in both employer and employee participation is simple: Insurance costs are out-of-sight. The study said the premium for employee-only coverage doubled from 2000 to 2011, increasing from $2,490 to $5,081. Family premiums went up by 125 percent, from $6,415 to $14,447, during the same time period.
Across the country, the Robert Wood Johnson Foundation study did not find a single state where employee-sponsored insurance actually increased, and 22 states saw decreases of 10 percent or more.
And Indian country? Only about four-in-ten workers and their families have employer-sponsored health care. Remember that many tribes and tribal enterprises are large employers that offer competitive benefit packages.
So what does all of this mean? Sure, the U.S. made a huge mistake linking health care insurance and work. Ideally we would have fixed that with health care reform, but that was politically impossible. So we came up with a sort of dual track, encouraging employer sponsored plans (including the large employer penalty that will now begin in 2015) and giving consumers a choice through state exchanges.
It is those exchanges that should be the focus now. In just a few weeks, people can sign up for insurance through an exchange if it’s not offered by an employer or if a policy costs too much. Starting next year there will be good health insurance coverage available with many subsidies for low and moderate income families. (Considering the demographics of Indian country, buying health insurance through an exchange will likely be either free or a really good deal. More on that later.)
Critics say that the Obama administration’s delay of the employer mandate shows that ObamaCare is unraveling. I think the opposite is true. It’s far more significant that both state and the federal exchanges seem to be moving forward and that individuals can sign up beginning in October with insurance options starting in 2014.
It’s true that the Affordable Care Act doesn’t fix The Great American Health Care Mistake. But it least it opens an alternative route.
Mark Trahant is a writer, speaker and Twitter poet. He lives in Fort Hall, Idaho, and is a member of The Shoshone-Bannock Tribes. Join the discussion about austerity. Comment on Facebook at: www.facebook.com/IndianCountryAusterity.