Getting a job typically means that a worker gets into ahealth insurance plan through the company as a job benefit. Thistie between employment and health insurance is taken for granted asif it were standard everywhere, even though it is unique to theUnited States.
Hardly anyone even wonders how or why job-tied healthinsurance got started here. But as the nation considers proposalsfor some form of national health coverage, the question is beingraised whether this arrangement should continue -- whether healthinsurance should remain an employment-linked benefit.
Its tie to the workplace is being challenged by some healtheconomists and members of Congress who are trying to devise abetter way to fund health care. Uwe Reinhardt, who is JamesMadison professor of political economy at Princeton University,recently reminded the National Governors' Conference how thestrange pairing began.
'This nation's job-based health-insurance system originallygrew out of a clever attempt, during World War II, to evade wagecontrols,' he noted. By converting wages into fringe benefits, thebenefits were exempt from the pay restrictions and from incometaxation as well.
However practical that approach was during times of fullemployment, when workers tended to stay at one job for longperiods, and when the cost of this job benefit was not cripplinglyhigh for employers, it makes little sense now. Nearly 40 millionAmericans lack any health coverage -- government-paid or job-linked--even though two-thirds of the uninsured are workers and theirfamilies.
Many small employers do not offer health insurance because theprice of premiums for individual workers is too expensive. Tenmillion of the uninsured are children whose working mothers are theheads of the families. No other industrialized country so callouslyignores the health needs of low-income workers and poor children.
Adding to the folly of job-based health insurance is thegrowing problem of job insecurity. As workers lose jobs they losetheir insurance benefit. Although they have the option ofcontinuing coverage for several months, to do so they must pay thecostly premium while unemployed.
If they leave one job to take another, preexisting illnessesmay block their acceptance into the new company's plan. Moreover,the extent of coverage varies from company to company. The crazyquilt of health-care funding in the US is now under scrutiny. ThePepper Commission study led by Sen. John D. Rockefeller 4th of WestVirginia recommends expanding Medicaid to cover all the unemployedas well as all the poor -- not just the young and the elderly innursing homes -- and making job-based health coverage mandatory.Others have suggested a range of payment plans from universalgovernment insurance to subsidized health insurance.
As new methods are considered, Americans will find thatcomparable countries build their health coverage on a broad andunified base. Canada funds its coverage from income tax revenues,and Western European nations generally tax company payrolls.Payroll-based funding enables smaller companies with lower payrollsto pay less.
Among the advantages in such universal coverage are thatvirtually everyone gets the same benefits for the same price andred tape is minimized. Nearly 10 percent of American health dollarsare wasted on claims processing and the administrative complexitiesof our diverse system.
The relentless rise in the cost of coverage now threatens toundermine the delivery of care. Widening gaps in coverage for theelderly, the poor and those with job-tied insurance mean that theproblem can no longer be solved by merely shifting costs frompublic taxes to private premiums. Workers and companies pay thebill, either way.
In questioning the basis of most health-care coverage in theUS -- its tie to jobs -- those trying to find a more equitable andsound way to fund it may finally have gotten to the heart of theproblem. Untying jobs from health coverage opens up other avenuesto the funding of health care. LMCLAU;11/13 NIGRO ;11/19,08:13 EHLTHCVR
