You Say You Want Choice

I have spoken to numerous people in the last few weeks who are concerned that they will lose some freedom of choice if the current system is changed. Leaving aside the fact that most of these people don't really have any idea how the current system works, I want to talk a little more about that.

What "choice" are they worried about losing?

The "choice" of insurance companies?

Many states right now have a only a few different insurers. These insurers are really not much different from one another, and to the extent that they are, the differences are lost in the complexity of the policies. This complexity is not accidental; it is built in to ensure that you cannot make an informed choice between plans, which means that they can add on all sorts of fees and hidden costs that you really can't understand without the help of a lawyer. And an uninformed choice is no choice at all.

People who say that they comparison shop between plans really just apply and take the lowest rate, and have no idea what they will really get, if anything, for their money. This "choice" is worse than worthless, as it will lead you to believe that you got a good deal when in fact you got coverage that won't be there when you need it.

Here's a choice that they should be worried about losing- the choice of where to work. Because 59% of Americans get their health care through work, many of them are literally unable to afford a change of jobs. Employer-based health care, of course, is subsidized by the federal government, and if you lose your job, or quit for any reason, or try to open a small business instead, you lose that subsidized health care. And when you do, you will be thrown into the individual market, and good luck getting coverage there.

In fact, if you have a pre-existing condition (which employer-plans are required to cover), the stark choice that you have is to keep working at your current job (while hoping that the economy doesn't take it away), or quit and be unable to get treatment for your condition. What kind of a choice is that?

This is actually a great deal for employers. They get subsidized health care for their employees, which they can then use as virtual blackmail to keep employees around. If you have a condition, or someone in your family does, your employer will find it pretty easy to pass you up for raises or promotions. You will find yourself virtually a slave to your employer; they will hold the ultimate card-the health of you and your family.

We should be asking a fundamental question. Why are employers involved in health care at all? The answer to that question is that during World War II, the government instituted wage freezes, and so employers started to add fringe beneifits in order to attract workers. And since they were never taxed, the practice stuck.

But it is an inefficient way around a temporary problem. We have hundreds of thousands of employers who are each struggling to figure out how to deal with health care, which is an issue that most of them know nothing about. And the government is essentially paying each of these companies to do this by giving them a tax break. Why not just have the government perform this role? They can have one agency, instead of thousands, whose sole mission it is to administer health care insurance.

Employers have no business being involved in this. Let's end it.