Why tie health insurance to a job?
Friday, December 12 2008
I hate to be Captain Obvious, but these guys are asking a question that has an easy answer: to keep sick people from getting it.
Okay, so maybe that’s not the real reason, but consider this: what other sorting mechanism does our system have? If you can work a decent job, you get quality health care. If you are too sick to work, you get lousy Medicaid. For decades employment-based insurance more or less functioned as a way to cut people from from higher-tier care when they got to be too expensive. Sure, it was never about the health care per se – but did it bother the company’s insurer one bit when the boss let someone go for “taking too many sick days”?
From an ethical standpoint this was always a shitty way to treat sick people – so why are Wyden and Emmanuel asking this question now? Let me sketch a possible answer, which may be a small or large part of the broader truth of the matter.
This system worked for about forty years. Then two things happened: first, the magic of science made it increasingly possible for chronically ill people to continue to work. This kept them in the top-tier system, which meant they could pay for the increasingly expensive drugs that kept them working so they could keep their insurance so they could pay for their drugs… you get the point. This was good for pharma companies, okay for sick people, and bad for employers and insurers.
Then in 1986, Congress passed COBRA, giving sick people access to care even if they couldn’t stay employed, and then in 1993 passed FMLA, giving sick people up to six weeks of time off to take care of themselves or their relatives. This meant that a significant number of people who would previously have been ejected from the system could stay in, with or without working. This was good for sick people, but bad for employers and insurers.
So the problem – and granted, this is mostly speculation – is that these two laws did significant damage to the sorting mechanism. Now you have all sorts of really sick people still in the top-tier system (and granted, a fair number were there already through spouses and parents), getting expensive care through private insurers. This may not be the only thing driving up costs, but is it entirely coincidence that medical expenses in this country really exploded (pdf) after COBRA became law in 1986?
So that’s my speculation; but even if any of this wool-gathering is actual fact, it would still be a mistake to blame COBRA or FMLA for the problems (or a portion thereof) of our health care system. These are good laws, intended to mitigate the fundamental injustice of our system. It is not the least exaggeration to say that these laws have kept me from poverty – maybe even alive. In any case, employment-based insurance has always been a de facto mechanism for denying sick people access to high quality health care.
This mechanism was never justifiable on moral or ethical grounds; only now that its perverse economic rationale looks unsustainable are people finally starting to question it. But even if they’re not clear on the answer, at least they’re asking the right question.
