Wednesday, August 19, 2009

More health care blah blah

I’m beginning to like what I’m hearing about decoupling health insurance from employment.  And if you think about it, it makes a lot of sense.

People who are working are, at the very least, healthy enough to work.  As a consequence, they’re cheaper to insure (pay doctors’ bills for) than people who are not healthy enough to work.  Most of the (allegedly) 50m people who are without health insurance are unemployed.  There’s a chunk who simply don’t want insurance, and can’t afford insurance, but the rest are either temporarily or permanently unemployed and for some reason do not qualify for Medicaid.

The unemployed uninsured I’m not so terribly worried about, because “unemployed” is generally a temporary condition that can be remedied by becoming employed.  Of course, becoming employed at a place that offers health insurance is another matter, but if you’re willing to work, there’s a dock somewhere that needs labor.

It’s the other folks, who are unable to work due to health problems that are the real issue here, and the way I get my health insurance is hurting their ability to get insurance.  Because I’m relatively healthy and receive my health insurance through my employer, the group rate I receive is reduced—I’m in a group of relatively healthy people who are healthy enough to work.  If, on the other hand, I break my leg and am unable to work, I no longer qualify for benefits through my employer as I am no longer an employee.  This puts me in a new group of people who are not healthy enough to work and, consequently, require more health care.  If I were able to stay in the first group of relatively healthy people, the contribution of all the premiums of all the other relatively healthy people would more than offset the added costs of my broken leg that has me laid up and too injured to work.  But I’d be in the injured pool where everyone is requiring medical payments that outstrip the ability to bring in revenue to cover those payments.

The short version is that the more healthy people you have in the insurance pool, the more capable you are to cover catastrophic injuries and the lower the cost of coverage for everyone, even the healthy ones.

Therefore, if the pool was sufficient large enough—not just the 1000 people who work with me, but, say 25m people who live in my state—then there would be enough healthy people to cover the sick people, assuming everyone had to pay a premium, even the invincible 18 – 23 year olds who never get sick.

 

The problem comes in to the practicality of the thing.  If you remove health insurance from employers’ benefits package, would that money go back to the employees or the shareholders?

If the money went back to the  employees, would the employees actually buy health insurance, or would they piss it away on cable or crap at WalMart, or another breakfast burrito at McDonalds every morning?

 

Personally, I don’t trust companies to return those funds to the employees.  And if they did return it to the employees, I don’t trust the employees to be responsible enough to actually buy health insurance.  If they were, McDonalds, Marlboro, and WalMart would be out of business already.

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