My last post about the failure of private health insurance was prompted by a conversation with a friend. Both of us are baby boomers, at that life-stage where we and our spouses work as much to secure affordable group health insurance as for the wages. Neither of our families has suffered major illnesses that would invite insurers to deny us coverage or offer us policies riddled with exclusions for “pre-existing conditions.” (Can conditions be otherwise?)
You could say that our self-interest in national health care is driven by our hope that we can retire someday. It’s not the economy or the state of our investments that most concerns us; it’s the threat of sudden bankruptcy due to a major illness or accident.
The linkage between health insurance benefits and full-time employment got me thinking: what if the two were de-coupled? Could the benefits of guaranteed health insurance outweigh the costs of insuring everyone? That question can’t be answered comprehensively. The equation depends on your philosophy – about the role of government, what we owe the elderly and the economically disadvantaged, and what must be left to individual responsibility.
I have a narrower goal. I’ll state the case for national health insurance in terms of one set of benefits: how it would help the U.S. economy, leaving aside questions of social justice. I’m not going to argue all the particulars of the legislation, including the mix between private insurers and the public option. For now, let’s define national health insurance as health insurance that is:
- Mandatory for all Americans and covers all Americans.
- Guaranteed coverage. You cannot be refused insurance by any company or government agency participating.
- Portable. Your insurance is not linked to any employer. You do not have to re-apply and your rates don’t change when you switch jobs or lose one.
- Uniform, with the same choice of benefits regardless of where you work or what insurance company administers the plan. This means you could opt for, say, Plan A or Plan B or Plan C. If you choose Plan B, it will be the exact same policy whatever company (or government) you buy it from.
- Paid for 100% by consumer premiums and the federal government. You might continue to pay your premiums by payroll deductions; however, your employer would not pay any part. Your policy costs you the same whether you pay it from your paycheck or your checkbook.
These conditions – especially government defining the terms of policies and the absence of employer contributions – are stronger than the legislation currently stalled in Congress. Many insurers would balk at participating (good riddance). A nationalized system like this, however, would have immediate and long-lasting economic benefits:
- Profits. Conservatives believe that every dollar businesses pay in increased taxes and mandated wages causes a corresponding decline in worker hiring and pay. If that’s true, then the cost of employer-funded health insurance is also a damper. The average monthly premiums for small businesses (including worker contributions) are approaching $500 a month. Freeing business from kicking in for workers’ health insurance would be the biggest boost to the corporate bottom line in decades, and job growth would follow. Smaller businesses pay the highest premiums and would benefit the most. Our exports would also increase, because U.S. businesses would have a cost structure more like foreign companies whose governments already provide for everyone’s health care.
- Productivity. Millions of Americans loathe their jobs. Many won’t leave them because they can’t afford to lose insurance, even temporarily. They’re squatters, motivated by fear of losing their benefits. If they could carry their health insurance with them, some would vacate, leaving job openings for people who really want the positions.
- New jobs. When insurance is portable, it will lead to new jobs, not just mobility between existing jobs. More workers could afford to go from full-time to part-time work, and take the leap into contracting or starting their own businessses. New jobs will increasingly have to come from these smaller companies, as larger companies continue to cut their workforce to please their lenders and the Wall Street analysts.
- Brains. Job squatting leaves few openings for youth in this stalled economy. It negates much of what we spent on their education. When someone graduates from college without a job, (s)he’s not acquiring the experience that will prepare her to take over jobs from older generations. The cost of delaying entry into serious jobs isn’t measured in our economic statistics, but it’s surely not good for our future to keep young talent waiting. A recent Atlantic magazine article by Don Peck documents how the recession is affecting the young – effects that may linger as they age. By everything I’ve mentioned above – job mobility, new hires, new businesses – national health insurance would accelerate job advancement, bringing more of them into middle-class status. Good for them, good for consumer demand, good for innovation.
I hear well-meaning people advise Obama to put health care on the back burner in order to focus on jobs creation. Don’t they get it? National health care is a jobs program, a rare “two-fer” in politics. Compared with so-called stimulus efforts to date, it’s far more defensible. Rather than a stopgap solution to keep some programs afloat, it would lift every business and many workers.
So cry socialism if you want. Businesses should be cheering for national health care. They have nothing to lose but their chains.