An article published today in the Northern Colorado Business Report indicates that for the seventh straight year the percentage of Americans under 65 with employer-sponsored health insurance coverage has declined. Roughly three million people across the country have lost their employer-sponsored health insurance since 2000. In Colorado, the number of people getting health insurance through an employer dropped 6.5% over the last seven years, resulting in about 5,000 people losing their employer sponsored health insurance.
The article reports on a study released last month indicating that (not surprisingly) the number one reason employers give for not providing health insurance is cost. And a whopping 59% of the employers surveyed in the study said that the most they would be willing to pay for health insurance would be $50/month per employee. With the average group health insurance premium for a family now hovering around $1,000/month, that $50 isn’t going to go far.
While most Americans do still get health insurance coverage from an employer, the current economic situation shines light on the inherent problems that go hand in hand with linking employment and health care. Layoffs and failing businesses result in not only people without jobs, but also people without health insurance. And in a recession, when people struggle to pay for groceries, coughing up hundreds of dollars every month for COBRA isn’t likely to be an option for a lot of people.
It makes sense to me that an expansion of Medicare would help our health care system. Medicare has much lower negotiated reimbursement rates with providers, but they also do a better job of making the reimbursement system easy to navigate. By expanding Medicare to cover more people with chronic illnesses, younger Americans, or people with claims over a set dollar amount, some of the burden of health care costs could be shifted away from private health insurance companies and onto a taxpayer funded system that negotiates far lower costs for health care. Doing this would enable private health insurance carriers to decrease their premiums, making health insurance more affordable for individuals and businesses. Since the government-negotiated reimbursement amounts are lower than those of private health insurance carriers, our tax dollars would stretch further than our current premium dollars. True, we would still be paying both – taxes and health insurance premiums – but we would get more bang for our buck. And there would be less anxiety about health insurance during economic downturns and recessions. Health care is too important to leave it solely up to market forces.