PDF Can you really trust computers?
The New England Journal of Medicine recently reported on a Rand study that concludes that the Accountable Care Act will result in a large net increase in employer-sponsored insurance offers. They predict that the number of workers getting insurance from their employers will rise from the current 60% to 86%.
The Rand study was based on computer modeling. Is there reason to think that the model is based in reality?
Yes and No
The study itself points to the reality of the experience in Massachusetts where employer based coverage increased after passage of a similar health reform initiative.
In addition, there is this little quirk in the recently released Kaiser Family Foundation 2010 Employer Benefit Survey.
Katherine Hobson writes about it on her blog at the Wall Street Journal.
The number of firms offering health insurance increased dramatically from 60% to 69%. If these numbers are to be believed, the US economy in one year reversed a trend that occurred gradually over the preceding ten years. The researches speculate that the spike may be because smaller firms that traditionally do not offer insurance were more likely to have gone out of business during the recent recession.
But more credible than the Rand survey is the tenor of comments to Hobson’s article.
We can not afford to pay for the insurance because the cost of the insurance took away more than half of the pay check and the income of our business can not afford to pay half of the cost as larger companies do.
Nothing has changed. Cannot afford decent insurance without HUGE deductibles and co-pays.
Our company has 75 ee’s and we had to discontinue coverage for all. The premiums were out of control
I have a very small family owned business with one other full time employee…he doesn’t have insurance through us…we would have to cut his pay as well as ask him to pay half the cost of the insurance in order to offer it to him.
Is it a good idea anyway?
Even if there may be marginal evidence that the PPACA will increase employer-sponsored health insurance, would this be a good thing?
The Kaiser study also reports that employers are reducing coverage and increasing employee out-of-pocket expenses. Is that a good thing? Will that serve the public goal of increasing access to health care?
Small employers don’t offer health insurance, not just because it is expensive. They don’t offer health insurance because they don’t have to.
A small business in New York City or Chicago can’t escape paying rent, but rent is an expense that is comparable in the same market place.
A shop owner who pays little more than minimum wage now has zero incentive to take on the costs of health insurance premiums that could represent a 30-40% increase in his labor costs. He will only do that when there is no competitive disadvantage to doing so. That will only occur in a system that requires all employers to provide health insurance, as in Hawaii, which does have a mandate.
It is still not a good idea
The doctor physician relationship needs to be a long-standing continuous relationship. Patients need to have a comfort level with their doctor and doctors need to understand the whole patient. This is behind some of the reform initiatives in the PPACA.
Yet the employment relationship is inherently discontinuous. It makes absolutely no sense to condition a continuous relationship upon a discontinuous one.
Employers want to hire healthy workers. Someone who is sick and cannot work, cannot afford health insurance and may not be able to get it anyway. How does this help employers.
The question is not whether the ACA will expand employment based insurance. The real question is how quickly can we transition to a single payer system where everyone is covered and pays according to their ability to pay.
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