OK, maybe it’s a stretch but bear with me.
I heard a senior exec from a big health plan say the other day that it’s hard to believe we will ever see the end of health insurance distributed primarily through the workplace in favor of an individual-based health insurance system. In fact, much of the health insurance industry is lining up behind staying with the system we know best and the one who has been our customer all these years–the employer.
That is understandable. As someone who came up through the ranks looking at the employer as the customer and individual health insurance as a minor product subset I have the same reaction.
But I will tell you that this idea of moving away from third-party employer pay and to a system of individual responsibility — or moving from defined benefit health insurance to defined contribution health insurance — has been coming on us for some time now.
My recollection is that this idea all started with Stuart Butler and
Bob Moffit at the conservative Heritage Foundation maybe 15 years ago.
Then it spread to more limited proposals for medical savings accounts
(MSAs) in the mid-90s and later to the HSA concept and the whole notion
of consumer-driven care. George Bush took it the rest of the way with
last year’s State of the Union proposal to end the employer tax
exemption in favor of an individual deduction for health insurance.
John McCain has now refined that idea with his tax credit proposal.
Nor do liberals need to be afraid of an individual-based solution.
Universal health care systems such as Germany, Switzerland, and Japan
provide health insurance to all of their citizens through a structure
that has the individual making choices from a list of private health
plans.
The bipartisan Wyden-Bennett health reform proposal — a health care reform bill to watch–now adopts the concept as do others.
Now, the Massachusetts health plan, the stalking horse for the
incremental expansion of the employer-based system that Barack Obama
favors, is showing us incomplete results on the access front for what
is turning out to be a very unsustainable cost.
The Massachusetts health law results are going to do even more to get
people worried about expanding that plan for the whole nation. If not
the Massachusetts formula for health care reform, then what?
My perspective is that this once far-out idea for an individual health care market is no longer so far out.
Is the country ready for such a leap from employer health insurance
plans that generally work very well for the people lucky enough to be
in them? Not today.
But a whole series of developments seem to be coming together–problems
with Massachusetts, the unsustainability of the employer system in a
global economy, a number of serious individual-based health care reform
proposals, an imperative to structurally deal with health care costs
not just dump more people on the existing system, and now a coming
presidential debate that will put this idea front and center.
I hear the train a comin’ and its getting closer all the time.
I find it compelling to break the mystical chain between employers and health insurance. the original concept was initiated to pave the way to universal health coverage but stalled out once the union realized what valuable tool for increasing benefits during negotiations employer health insurance was.
It would be nice to allow employers to raise real compensations instead of saying that all potential raises are eaten up by healthcare costs.
If we are ever going to enable the healthcare market to fully function as a capital market then it can not be artifically pegged to an incomplete coverage group. An employer driven model makes the system jump through hoops to address portability, affordable coverage for small business and un-employed, and costs transparency.
Fastest way to universal single-pay is individual insurance where the insured is not protected from the reality of dealing with the insurance industry. Bring it on!