Millions of Americans rely on employment-based health insurance, but problems caused by the linkage of insurance to employment are increasingly evident. Notably, with millions losing their jobs because of the COVID-19 pandemic, a major flaw of employment-based insurance is glaringly obvious: lose your job, and you lose your insurance.

That is only one of the problems. As health care costs rise, employers must commit more money to premiums instead of wages, so take-home pay stagnates. Workers and their families must pay more for premiums, copayments and deductibles. The range of services covered is reduced, and employment-based plans often provide few choices while funneling enrollees into restrictive networks. To the detriment of both employees and employers, some workers stay locked into jobs they don’t like for fear of losing insurance coverage. This fear may deter ambitious, creative persons from pursuing their entrepreneurial aspirations.

Employment-based insurance generates much higher administrative costs than public programs like Medicare. Overhead costs are higher for hospitals, medical practices and clinics just to pay for the large clerical staff time and effort needed to deal with the layers of insurance company red tape and different complicated rules for each plan. A single-payer system would substantially reduce this burden.

Providing health insurance for employees increasingly harms businesses. This is a drag on profits. Businesses that operate in the global marketplace face competition from companies in countries that have universal health care and do not need to pay insurance costs. Interestingly, in some countries where taxes fund health care, companies still pay lower tax rates than American companies. In the U.S. the cost of employee health insurance is built into the price of products, a “tax” that consumers pay to insurance companies.

The newly unemployed have the option of continuing their insurance for up to 18 months. They must pay the entire premium, however, which is not financially possible for many. Unfortunately, this has become a cruel reality for the millions of Americans who have lost their jobs in the COVID-19 pandemic. Many of them are recognizing the value of a single payer Medicare for All system. Medicare recipients have much to worry about in the current crisis, but they do not need to worry about losing their health insurance. The crisis dramatically accentuates the dangers of coupling insurance and employment and emphasizes our need for a government-sponsored health program that covers us all.

Writers include: Jeffery Belden MD, Robert Blake MD, Steve Calloway RPH, Bridget Early MD, Rosann Geiser RN, Linda Headrick MD, David Mehr MD, William Parks MD, Susan Pereira MD, Margie Sable DrPH, Mahree Skala MPH, Jan Swaney MD, Hank Taylor MD, all of whom are Columbia health care providers. 

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