Decoupling Health Insurance from Employers: A Path to Improved US Healthcare Outcomes

When discussing the potential improvements in healthcare outcomes in the United States, one often grapples with the status quo of employer-sponsored health insurance, Medicare, and Medicaid. Would decoupling health insurance from employment truly yield better healthcare outcomes? This article delves into the intricacies and potential benefits of such a change.

Understanding the Current System

Currently, out of every dollar paid towards healthcare, only 10 cents go into your account, 25 cents is allocated towards administration, 40 cents goes to the board for top salaries and building maintenance, and a whopping 25 cents goes to campaign funds to maintain the status quo. This systemic inefficiency and the heavy administrative burden highlight the need for reform in the healthcare industry.

Employer-Sponsored Health Insurance: A Boon or a Bane?

According to statistics, 60% of employers act as insurers, handling the third-party administrative role of the company-issued health card. This administrative burden, when managed in bulk, is cost-effective. However, moving towards individual coverage or individual managed claims would mean managing each person (Mary, Fred, Jane, Steve, etc.) separately, increasing paperwork and costs. This change may explain why one government payment processor in Ontario can only handle 8 doctor’s claims, underscoring the inefficiency of current systems.

Decoupling Health Insurance and Its Benefits

Decoupling health insurance from employment is not about socialized medicine; it's about common sense. If you're working and able to pay towards health insurance, you should be able to stay on the plan without the need for constant job changes. The real benefit lies in promoting economic freedom and growth.

Encouraging Economic Freedom: Many Americans are held back due to the fear of losing health insurance. Decoupling would allow individuals to pivot more freely between jobs and start their own businesses without a detrimental impact on their healthcare. Better Underwriting: The current system underwrites risks based on group dynamics, not individual health status. By changing the group from a specific employer to a broader pool of employed and self-employed individuals, health insurance rates could become more rational and aligned with personal health status rather than job changes. Historical Context: The current employment-based health insurance system arose from wartime wage control exemptions during World War II. Truman's proposal for a nationwide system not tied to employers, representing a rational approach, was met with resistance and has remained unimplemented since 1948.

Comparative Analysis: Obamacare and Its Successes

Michael Bloomberg, a key figure in healthcare reform, highlighted that the Affordable Care Act (ACA), often derided as Obamacare, actually represents a return to a more rational insurance system. The law shifted from employer-based group insurance to a broader pool, making coverage more accessible regardless of employment status.

Specifically, Obamacare dismantled the connection between a specific job and an individual's health insurance, aligning more closely with Truman's original vision. This approach was notably successful in Massachusetts under Mitt Romney, where approximately 97.4% of residents had health insurance by 2017, showcasing a practical implementation of this principle.

In conclusion, decoupling health insurance from employment is not only feasible but also imperative for enhancing healthcare outcomes in the United States. Moving to a more individual-centric and economically rational system would liberate people from the shackles of job-based healthcare, promoting freedom and economic growth.