Why is it that employers must provide/subsidize healthcare?

[Laura PourMeADrink]

An otherwise intelligent, successful, personally generous Republican (I know, an anomaly) asked me this question - "Why is it and when did it happen that it became the businessperson's responsibility to provide healthcare to people? " All I could think of was that it was the "right thing to do," and that it was "in their best interest to have a healthy work force," and "who else?"

[gollygee]

1. I think he's right

We should have a government-funded healthcare system for everyone. I think having it tied to employment is too hard on people and too much of a burden on businesses.

[OneGrassRoot]

3. I'm hoping the business community will now want to support single payer...

as the burdens of reform come to light.

What we have now is obviously merely insurance reform, which is definitely a much-needed step in the right direction.

But, bottom line, we need a single-payer system.

We need to educate the business community and get them on board!

[PeaceNikki]

11. That, I hope, will turn out to be the genius of ACA.

I hope and expect it will morph into that AND be "their" idea.

[OneGrassRoot]

13. 'xactly. ;) n/t

[SharonAnn]

31. It developed during WWII as a way to attract workers when wages were fixed.

It was a benefit also sought by labor unions as part of employee compensation.

I believe the real impetus was the wage-price freeze during WWII and providing health-care was a benefit that wasn't considered a "wage".

[Laura PourMeADrink]

10. This is where he probably would disagree - since he would say that taking healthcare out of the

private sector would result in reduced quality since it would remove much of the monetary incentive to become a doctor, those reducing the pool of doctors.

So, if the employer doesn't subsidize, the government doesn't, that that only leaves the individual.

[yardwork]

28. There's a big difference between health care and health insurance.

People get mixed up about these two very different issues. They think that "single payer" means that the U.S. government would suddenly employ all doctors and nurses. They're thinking about the British system, rather than the Canadian one.

We're talking about removing the for-profit middleman from the health coverage side of the equation, and essentially expanding Medicare to cover every U.S. citizen. The health care providers would continue to be private. This approach would improve the monetary incentive for most doctors. It would drastically reduce the bad debt that many doctors and hospitals currently have to write off. It would drastically reduce the costs associated with having to file so much paperwork for so many different insurance carriers. And it would remove the expensive middle-man - the private insurance industry - from the equation. The result would be cost savings for all of us.

[caraher]

2. Because we have an insane for-profit insurance industry?

Really, it does NOT make sense to have employers do this. What would make sense would be a single-payer system and to decouple access to health care from one's employment status.

Your Republican friend should take that up with the people making money rationing healthcare...

[brokechris]

14. health care costs

I grew up out in the desert and we had the old fashioned kind of care---the doc only came to town once a year and you could pay him with a sack of groceries. That was actually pretty nice--and I loved having a relationship like that with my Dr. but of course we didn't have access to fancy stuff like MRIs.

I can understand why the tests and complicated equipment is expensive--but I don't know why Drs feel they have to make 300K per year?

What we should do is pay for their education so that they don't come out in as much debt--but then when they get out they work for the government and make a nice, but not outrageous salary.

[yardwork]

29. Very few doctors make $300,000 a year. Most make a lot less than that.

"Fancy stuff like MRIs" save lives. Without them, doctors can't make diagnoses. They can't cure people who are sick. No doctor wants to go back to delivering babies on kitchen tables and being paid in moonshine. You can't find qualified doctors who are willing to practice medicine like that anymore, and if you did, you wouldn't be happy with the quality of the care you received.

[brokechris]

35. Not sure where you live,

oh I'm not saying we all should get low tech health care--although it seemed to work OK. Most people in my family lived past 90 and usually all we saw was a nurse practitioner.

Drs here (Cal) make major money--but they have huge bills. College, setting up and running an office, malpractice insurance. I have a friend who is a pain management specialist in Seattle and even he makes over 250K per year--however his bills and then taxes take most of it and he says he takes home 70-80K after it is all said and done.

[caraher]

32. Doctor salaries are not the main driver of increased health care costs

I do like your model for medical education. It should be free for the well-qualified and unavailable to the unqualified, and there should be stable and well-paid employment at the end.

But there are other reasons our health care costs too much. One is technology, and that's on balance a good thing (though of course, too much of it goes into the practice of "defensive medicine&quot . The other is the entire model of for-profit medical care. Every civilized nation pays less for the same standard of care than we do because we support an entire industry devoted to paperwork, denying care, paying CEOs salaries vastly in excess of those paid the doctors who actually provide the care, and marketing activities such as advertising. No need for any of it...

[brokechris]

36. I wasn't trying to say that they are a main driver.

Just pointing out that it used to be different with a direct relationship between Drs and patients. I was delivered at home--the Dr came out to the house and my folks gave him a few chickens in payment. Yes--we were hicks out in the sticks and yes we didn't have access to the best that money could buy--and no I don't expect for it to ever be like this again. I don't see how it could work that way in a big city.

Just pointing out how vastly it has changed.

My friend came out of med school over 100K in debt and in his 30s--he has to make a lot of money in a few years. Setting up a practice cost him half a million dollars--and it is several hundred thou a year to run it. Plus high malpractice insurance.

For the patients---in order to protect from lawsuits--they run lots of extra expensive high tech tests.

And having a middle man (insurance OR government) runs up costs too--because those people will have to be paid to do their jobs.

Health care is never going to be cheap again.

[postulater]

4. It's a trade-off

Workers got a crumb for not demanding their share of corporate profit. It protects the employer from revolt.

But now that healthcare is so expensive that it cut into profits more than wages do the employers want to cut it out.

And now is time for the next step. Bypass the connection to corporate capitalism and go to Medicare for all.

[Laura PourMeADrink]

16. I agree - but then you would have to convince them that the cost of increased taxes would not

outweigh what they are subsidizing now, and that quality would be maintained.

I still think that this all ties back to the evolution of "instant business news" which has forced companies to operation for today instead of long term. In the past, no one expected companies to increase profits consistently, always over and above what they made for the last quarter. You might have owned 50 shares of IBM, and looked it up in the newspaper once a week and if you saw $0.50/share growth you were happy.

[Lindsay]

5. I could be totally wrong about this

(it happens a lot) but I think the association of health care benefits and employment came about circa WWII, when wages were frozen and employers were looking for a way of attracting employees.

Not a bad idea at the time, but very different circumstances than we have now.

[HereSince1628]

6. It's an historic consequence of healthcare being an inticement to employment

~70 years ago.

IMO it had next to nothing to do with business doing the right thing.

[Laura PourMeADrink]

20. exactly...."Doing the right thing." That is also was is also what is missing completely from

the right. And, exactly why there is no compromise. In the past, dems and reps all agreed that we needed to care. It was just a matter of how and how much to help. There is compromise opportunity there. But, if they don't even believe in the basic premise...

[treestar]

27. Right, wasn't it a way to get around a wage ceiling?

And then it became almost like canon law. We need to get away from it. If people had to cover themselves with their earnings - say they were paid the amount the insurance cost by being the conduit for it - they would be much more likely to support single payer.

It's like the way the IRS takes taxes out during the year. Wise, but people don't "feel" the taxes this way. They rant on about being tax payers. But if they had to write the check themselves each year rather than having their employer pay it and then get back the excess, well they'd be a lot less likely to support the wars, etc. They'd know now much they were paying and feel it.

[HereSince1628]

34. Yes I believe it was, then it became a "business as usual" alternative to monetary compensation

If a corporation was clever, and many were, they could negotiate very favorable healthcare insurance costs or self-insure both of which helped hold down medical costs.

[MrYikes]

7. before businesses got involved

you took care of your own insurance (or not), but by providing insurance you had to stay with the company and it cost so little at the time, that it was an easy thing for companies to do.

[brokechris]

8. I was taught in college

that companies offer it in order to be competitive for the best workers. I don't know that most of them particularly that much about people's personal lives--but it would be nice to think so.

[geckosfeet]

9. They used to do it as a benefit to attract and retain employees.

Now that "the labor pool" is considered expendable and a commodity, they are not so worried about keeping people as they are about suppressing wages and keeping job candidates climbing over one another for a chance to apply for an opening.

[madrchsod]

12. back in the old days....

people shopped around to see what company had the best benefits. companies used benefits to attract the best workers . i remember companies trying to lure away workers from other companies by using benefit packages.



that was a long time ago

[Laura PourMeADrink]

21. yes. And also, a long time ago, you simply paid your "doctor visit" bills - maybe even had a

payment schedule with your doctor. Insurance was limited to "hospitalization" only.

I have never understood this....how we all allowed a for-profit industry to evolve....an industry that profited from routine healthcare. It's like a group of people sat around a table and said "How can we make money? Hmmm.. everyone in the whole world goes to the doctor. Bingo."

[Coyotl]

15. He is correct and they should not have to. Plus, why attach healthcare cost to American products??

Other nations can make and sell cars in our markets without the cost of healthcare added into the car!

[quaker bill]

17. Not actually true

the cost is just added elsewhere in the cycle, there is no free lunch. The competitive difference is that the same level of service costs vastly less when profit is largely taken out of medicine. Businesses elsewhere don't pay premiums to insurance companies, but they do pay taxes to fund the system. Healthcare does get paid for in these economies.

[HughBeaumont]

18. Therein lies the rub - we all know WHAT needs to happen to cure this problem.

Problem is, corporations would never allow that painfully obvious solution of Universal Health Care to see the light of day.

Regular folks seem to have this belief that corporations and the wealthy that run them are in competition with each other. It's BUNK. Rule One of "The Big Club That We're Not Invited To" is you don't step on a fellow Big Clubber's toes. They're in collusion . . . collusion to "keep those ants in line". One of the ways they keep us ants in line is by doing everything in their power to not GIVE us power.

Instituting Universal Health Care would give employees the power to quit crapola jobs that don't pay dick. It would allow prospective small businesspersons who cannot start up because of health care costs to quit jobs and make their own way. It would remove the practice of ageism. It would force them to pay more, since they wouldn't be able to use the canard of "weelllll, benefits cost us money . . . "

It takes away an employer's bargaining chip and they know it. It's got nothing to do with poor service, salary incentive, lack of doctors, etc. They need to get OFF that. Only an idiot buys that excuse.

CEOs don't want a "Win-Win" on this issue. They don't want to provide health care, but they don't want proles getting it from his tax dollars either. They think that's the same thing as them providing it.

[Laura PourMeADrink]

23. Why not compromise. Why not de-couple routine healthcare from hospitalization? That's

where we want the best minds, right, in surgery. Let the private sector profit from hospitalization....let the government provide routine care which could be done more cheaply with PAs and EMT types.

[brokechris]

38. I like this idea! (nt)

[LWolf]

19. Because the U.S. MUST be capitalist

and the right thing to do, a national health care program, is socialist.

That can't happen, so it leaves health care connected to business instead of where it should be, as a public right and public service.

Business wants to own every public service. How else can they profit from it?

[juajen]

22. It was once part of a benefits package to get and keep good workers. It also sometimes included

life insurance, holidays, paid vacation, 401K or retirement program, company stock, etc. The only companies that do that now are large corporations, like Exxon, Halliburton, and, the best one, Starbucks. Of course, Starbucks is a blue company, and Howard Schultz is one in a million, but every employee is considered a "partner" and actually has rights. Don't complain about the cost of their coffee, and shop there for unique presents when you can. Yep, I love Starbucks.

[Puzzledtraveller]

24. No, the asnwer should have been 100% nationalized HC

Infact, it would help businesses, think of how many would benefit from no longer having to pay out for HC!!!!!!!!!!!

[TreasonousBastard]

25. The answer is simply-- Who else? Every national system I'm aware of...

taxes businesses to pay for the bulk of it simply because they have the money.

"The government pays for it." Sure, but it pays with tax dollars which someone has to pay.

Right now, the per capita healthcare costs in the US are $7,000 or so. Private insurance, VA, Indian Health Service, Medicare, Medicaid, personal assets, charity... lots of methods of payment, and government picks up maybe half the tab already through general and specific tax revenues.

But, if we're going to have a single plan, somehow we're going to have to come up with 7 grand per person (that's 28 grand for a family of four) and it's not coming from an income tax or general revenues-- 331 million population x $7,000= a little over $2 trillion a year. That's a lot of money.

So, who pays?

Who gets taxed 2 trillion a year?

[kurt_cagle]

26. A Culture of Corporate Dependency

The mindset of corporations is to leave no profitable niche untapped, and to create dependencies where none existed before. In the aftermath of World War II, there was a labor shortage as pent up demand caused unemployment to reach its lowest point in history. The jobs involved were generally labor intensive, and many companies employed doctors on staff to handle the frequent injuries such labor entailed. However, doctors are expensive, and they too were in high demand, so many companies began to offer a stipend to cover doctor visits as doctors either went into private practice or started working for the mega-hospitals that also emerged after WWII.

As health care costs began to rise, it made sense to pool funds, since in general disease and injury costs were comparatively rare on an individual basis - the number of people who were sick or injured at any given time was sufficiently low that companies investing into the pool would only tap it when injury did occur, which meant that over time, you ended up developing a tidy profit. What's more, the people being covered were generally men and (a few) women in their prime of life - mid twenties to early sixties, were reasonably affluent, and were usually in good health.

Such pools naturally attracted speculative investors, who realized that if they had control over these buckets of money, they could invest it in other areas. So they bought out the company pools and established themselves as insurance companies, and then began expanding that pool to cover higher and higher risk people via higher deductibles, as well as investing outside of the health care domain entirely.

That's when things began to go south. More than a few insurance companies wracked up losses in other areas through bad bets, and they rose rates to compensate. Health care providers invested in new technology, which had to be amortized, and the pharmaceutical industry, seeing an increasingly captive market, expanded their own R&D while at the same time taking larger amounts off the top for administrative purposes, as did the insurance companies themselves. In the 1970s there was an attempt to reform the industry with Health Maintenance Organizations, but these eventually went from a gateway to being a facilitator of the health care complex. Demographics caused problems as well, as their core pool aged and placed higher and higher demands upon the system. In essence, the health insurance industry ended up building on a Ponzi scheme that sustained itself for about fifty years, but is reaching a point where the number of new investors into the scheme cannot cover the accumulated debt and bad investments of all previous investors.

Today, the system is collapsing, and like so much else that the private enterprise system has created, it has left the mess to be picked up by the taxpayers. Yet the insurance companies don't want to lose the pots of money they have - they simply want the government to pick up those people that are a net loss for them. Since many of those same insurance companies are now partially or totally owned subsidiaries of the giant investment banks, those banks are also vehemently opposed to reform. The pharmaceutical and medical supply companies are generally opposed, since much of the cost of drugs and the like are in effect hidden by what the insurance company does cover, as are costly procedures performed by the hospitals.

I'm not sure where things will end up. My suspicion is that in the end, ObamaCare will end up as the two tier system it is today - individuals will either buy directly into the government pool or into a private insurance pool. Employers will get out of the insurance business altogether.

[riderinthestorm]

30. This will soon, very soon, become the standard view for most businesses

Most businesses spend anywhere from $5k - $10k subsidizing EACH employee's health care policy. Plus they have to hire a benefits manager(s).

The $2k per employee penalty will be far cheaper for most corporations to pay. They aren't altruistic - they don't care if its the "right thing to do" or if its in the best interests of society to have a healthy work force. There's always more workers who are hungrier, and will work for less.

Once more (and more) companies simply stop offering health insurance, and simply pay the penalty, you will see the mindset swiftly change towards decoupling employment from health insurance. As middle managers (and above) struggle to secure health insurance (and health care) for their families, hopefully the demand for single payer will also begin to come from corporate America.

The more angles we can exploit that will bring pressure to bear on Congress to institute a public option or single payer, the faster it will happen.

The short term pain will be hard though.

[brokechris]

37. new health care

at my last position, we had a benefits manager who did only health care stuff. She made a pretty large salary. Plus we had over 40 employees--who were all assisted quite a bit. My plan would have been 600-700 per month--I only paid around 80 per month (plus my copays).

So yeah--they could save considerably if they cut this benefit out.....

[Egalitarian Thug]

33. Your friend needs to study the history of post WWII American economics to find the answer.

Briefly, it all started as a way for companies to not pay their employees as much as they should have.