End Employer Based Health care

By Amber Pawlik

Right now, the hot topic of debate is health care reform. Democrats in Washington and President Obama are pushing for some form of universal health care. The details are still being hammered out. Some people involved in this lament that nay-sayers of the health care reform should come up with their own solution. Here is mine: let health care be completely the province of the free market. This necessarily means ending employer-based health care.

From an ideological standpoint, I am a complete free marketer. I do not believe that the government should meddle in the supply or consumption of goods in the least. Mandated employer based health care is a violation of that. By law, an employer must provide health care to its employees. I am sure there are some exceptions and details about exactly how this works but for the most part, all companies are required, by law, to provide their employees with health care. This is of course government intervention. If I am making widget X and I need someone to help me make widget X, I should not have to supply that person’s health care. In the free market, we should be able to negotiate what we exchange with each other, not have it dictated.

From a practical standpoint, however, as usual, free market ideology wins as well. As a typical American, who has a mortgage and pays taxes, I still want to end employer based health care. The reason is because I want more choice. For the most part, I do not choose who I work for based on their health benefits. Yeah, they come into consideration a little bit but for the most part, I am going to choose a job based on what skills I have, what skills the company needs, what type of work I want to do, etc. By forcing the employer to pay for my health insurance, I am mostly stuck with the (often crappy) health insurance they are going to offer me.

To make this point more clear, say you want to buy a burger. Due to some enlightened politician somewhere, it was signed into law that all burger providers will also provide French fries—free of cost to you! Do you think that the French fries that they are offer are going to be the best around? When you go to the fast food joint, for the most part you are picking what burger you want. You get stuck with whatever French fries you get. Yeah, you might decide that you aren’t going to place X because they have bad fries, instead you are going to place Y, but what if place Y had worse burgers? By linking the burgers and fries together, you are less likely to get both a good burger and a good bunch of fries. If they were kept as separate commodities, you would be more likely to get the burger you want and the fries you want.

If you think employer mandated health care is great because it’s “free” to you, you are sorely mistaken. Nothing is free. Nothing. The only thing it accomplishes is it decreases competition.

The health care companies probably love employer mandated health insurance. They sign up with a company and they are guaranteed hundreds, possibly thousands of customers. They don’t have to compete as much for your business.

If am unhappy with my particular health insurer, I want to say “bye bye” and move on to the next one. I don’t want my employer to tell me how much they are willing to pay for my monthly costs or copays. I want to negotiate directly with the health insurance company.

If health insurance were totally private, it would force insurers to compete for your business. You would have more choice and, in the end, it would likely be much cheaper.

Democrats are trying to ignite fear in people by saying that it is likely many people will be without health insurance for one month or more by the time they retire. Throughout history, most people didn’t have modern science let alone health insurance, so going without health insurance for one month is really a serious problem!! Joking aside, ask yourself: why do people risk going without health care for one month or more? It’s because they will lose their job. It’s because health insurance is tied to employment. If health insurance wasn’t tied to employment, and someone got fired or laid off, they wouldn’t lose their health insurance. Sure, they have the burden of figuring out how they will pay for it now but it won’t be yanked until they find another job—or they pay the exorbitant amount that private insurers charge now, as they are unable to complete with employer based health insurance. If you lost your job, you would keep your health insurance, just like you keep your cable and your cell phone, and it would just be another bill you had to figure out how to pay.

Leave it to the government to design a system which leaves people at higher risk to be without a commodity, such as health insurance, and solve the problem with more government!

The other effect of employer based health care is the burden it puts on business. A fledgling company might not be able to afford paying health insurance for its employees. If a couple of young people just want to go into business and bang out a little bit of profit, why should they be strapped with paying health insurance? Everyone’s needs are different: not all people want health insurance. Some people just want to make a buck or two. By mandating employers pay health insurance, as usual, choice is limited.

Some say that if health insurers were private, some people would find it hard to find insurance as health insurers won’t pay for them. That may be true but look at the situation now. At one company I know of, 80% of the cost that the company pays for health insurance is due to just a handful of employees. As such, the price is jacked up unreasonably high for the rest of the employees—$750 per month for a family. If it weren’t employer based, those expensive people would be spread out across a much larger group. Also, there are some people that SHOULD pay more for health insurance. If you smoke or abuse your body in someway, it should not put extra burdens on other people. The free market would be much more apt at responding to this—much to the chagrin of people who smoke I am sure! But this is a much more organic way to pressure people to not smoke than the government-mandated crack down on it.

If you want “affordable” health insurance as the Democrats keep saying they want—let it be completely and totally put on the free market, which has a several hundred year history of proving it can provide customers with what they want better than the government!

Amber Pawlik

September 12, 2009