Health Care Reform Protestors Continue To Ignore Employment-Based Coverage
Some people think the original sin of health care and health insurance is government regulation and "patches" like Medicare and Medicaid. Other people think the problem originated from a different government sin—the employer health care tax exclusion. This tax break translates into significant money saved for individuals enrolled in employer-provided health plans. Individuals not enrolled in these plans and who purchase health insurance, do not receive these savings.
So which sin should the country address first, health insurance regulations and patches or health insurance costs equity? The easiest issue to address—equalizing or eliminating the special tax treatment of employer-sponsored health insurance plan payments is a good place to start. But our time-strapped Republican-majority Congress decided to spend the majority of its limited attention tinkering with the political and policy challenges of health care regulations. The Congressional health care reform bill, the American Health Care Act (AHCA), does not equalize or eliminate the employer health care tax exclusion but goes very far in changing health insurance regulations.
These proposed regulatory changes will take hundreds of millions of federal dollars out of the health insurance and health care system if they survive the Senate and reconciliation processes and are signed by the President. Potentially, tens of millions may lose their health insurance coverage and access to health care. People opposed to the AHCA are focusing their energies on protesting at congressional town halls, emailing and writing their representatives and educating the public about its possible impact. It's an uphill battle for these protestors to change the course of legislation, which is why I think they may have more luck at addressing the unequal tax treatment of health insurance premiums that exists between employer-sponsored and individually paid private health insurance.
The AHCA, in a very limited way, does address the employer health care tax exclusion by providing tax credits to individuals that purchase health insurance. However, these credits may not equal the value of the exclusion and the health plans available in the individual market do not equal what employers offer. So, at a minimum, protesters should demand that the AHCA equalize the tax treatment of all health insurance plans. But they shouldn't stop there. AHCA opponents may have more success trying to convince employers to stop providing health insurance or provide only supplemental health insurance.
Eliminating employer-sponsored basic health insurance has many benefits for employers and the country. The most important benefits are it puts all Americans on a level playing field when accessing health insurance and gives our elected officials a baseline for comprehensive health care reform for everyone in the private market. But the benefits of eliminating employment-based basic health insurance for employers are just as great.
Employers can save money by not offering health insurance coverage or by offering supplemental only coverage. Employees continue to enjoy the benefit of an employer selecting a few (supplemental) health plans for them. Employers also have the freedom to design supplemental health benefits program that makes them stand apart from competitors but don't cost as much as comprehensive health insurance coverage. Also, employers may attract more freelance and foreign workers. And, employers can avoid or address culturally sensitive health insurance benefit issues like coverage for contraceptives without going to court.
Right now, employers are as big an impediment to national health care reform as any other challenge. As long as they provide workers with comprehensive, less expensive, government tax-favored health insurance, the government will skimp on the rest of us. On the other hand, providing employers with a way to save money and remain competitive by offering supplemental insurance coverage may make health insurance more affordable for all of us. Maybe employers would be willing to drop their basic health plans if we let them know that that is what we want them to do.