The Obama administration’s decision last week to delay a mandate for large employers to provide health insurance or pay fine is both meaningless and significant.
It’s meaningless because it impacts such a small number of employers. Nearly all employers with more than 50 employees already provide health insurance. And those that do not, are unlikely to change course because of the penalty (even at $2,000 per full-time employee that costs far less than insurance).
But it’s significant because it highlights The Great American Health Care Mistake. This country should have never forged health care to work. It was an accident, a way to avoid wage controls during World War II. No other country in the world has such a crazy system. And it makes no sense to let our employers make decisions about our health care. All the basic stuff: What kind of coverage we buy, what should be covered, or even our provider networks and, therefore our doctors.
This mistake let Americans “pretend” that health insurance did not have a cost. It was a quiet part of our compensation, but because it’s not measured by the employee (although that will change soon), it wasn’t something we were willing to spend money on ourselves.
But employer-sponsored insurance is declining. It’s a trend that began before federal health care reform. The percentage of Americans who receive health insurance through employers dropped from 69.7 percent in 2000 to just 59.5 percent in 2011, according to a report by the Robert Wood Johnson Foundation.
And even when company insurance is offered, more employees are saying, “no thanks.” In 2000, 81.8 percent of employees who were offered coverage enrolled. A decade later, the Robert Wood Johnson Foundation study reported, only 76.3 percent did.
The reason for the decline in both employer and employee participation is simple: Insurance costs are out-of-sight. The study said the premium for employee-only coverage doubled from 2000 to 2011, increasing from $2,490 to $5,081. Family premiums went up by 125 percent, from $6,415 to $14,447, during the same time period.
Across the country, the Robert Wood Johnson Foundation study did not find a single state where employee-sponsored insurance actually increased, and 22 states saw decreases of 10 percent or more. (more…)