In The New York Times Milt Freudenheim reports a little too gushingly about the attempt by a number of big companies to let the part-time employees that they don’t cover buy into their health insurance programs.
The companies are taking a small first step toward slowing the spiraling growth of the uninsured, who now number more than 45 million. They acknowledge that the program is far from an overall solution, but they are addressing a challenge that government officials have largely ignored, said Steven M. Coppock, a senior actuary at the Hewitt Associates benefits consulting firm, which is helping the association with the program.
Surprise, surprise there’s a benefits consulting firm selling yet another new idea here. I’ve started describing CDHPs as the bastard child resulting from a one night stand between benefits consultants with nothing new to sell and a libertarian think-tank that can’t do basic math. This pretty much comes into the same category.
There are some good things about this program, in that it allows the uninsured to buy into the benefits of a big group program, at the same rates that the company is paying for its "real" employees, and not having to worry about pre-existing conditions. Of course, this won’t do a whole lot to solve the uninsurance problem for two reasons. One, the vast majority of the uninsured don’t work for these big companies (or if they do they work for companies that pretend that they’re not big, like the franchised outlets of the fast food restaurants). Two, the problem of the majority of the uninsured is not just that they don’t have access to insurance, but that they can’t afford it. There are some people who are priced out of the individual market by medical underwriting who can buy a much better product in the group market, and for them this is a good option — but that’s a low number. In general you might get a better rate (in terms of premium per benefit rather than straight premium cost) from a group plan, but if you can’t afford an individual plan of any kind you probably couldn’t afford this either.
Unless I’m really missing something there are three blindingly obvious statements to be made about this effort.
1) Part of the way employers have got out of offering benefits is by asking employees to contribute for their dependents’ costs. The numbers of employees who are offered benefits (especially for dependents) but don’t take them up is high and increasing, (although that only accounts for about 1/4 of the uninsured–the rest just don’t get offered insurance by their employers). This program is really just an extension of that, and regular employees must be feeling that they are not so far away from being told that like the part-timers, they too must start paying for their care. That’s the trend that the NY Times should be writing about. While it’s not what they are writing about, plenty of others have noticed. (Note that employees remain highly opposed to losing health benefits because they understand the grimness of the alternative).
2) As the Progressive Policy Institute and many others have suggested, if we are to allow people to buy into group programs, the logical way to do it is to open the FEBHP to everyone. Of course all buying groups like this will attract poorer risks who can’t get a better deal from the cream-skimmers in the individual market — but the FEBHP might just be big enough to let them all in and deal with it, and of course it has the heavy hand of the Feds behind it to spank any health plan that starts playing games. Of course letting everyone into Medicare is a further logical extension….but let’s not get too far ahead of ourselves.
3) Given how ineffectual this is going to be, why is the NY Times covering it?
Coda: By the way I’m pretty unimpressed with the HR people at big companies. I talked to a group of VP plus level HR people last year, and I gave them a hard time about how they were allowing the health care system to run them around. A number of them said, "but we do so much more than we did five years ago". I asked them which of their other suppliers had they allowed to hit them up with 15% annual increases for the past five years running, and not one of them had a word to say.