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Employment based health care.

June 22, 2012

I’ve been wondering the last few years why we have this system of health insurance being provided by employers.  I think it’s a lousy system, personally.  People who work for small businesses are often left out.  If you leave a job, you have to get another full time position offering insurance or pay four times as much for the coverage through COBRA.  Employers avoid offering benefits by keeping people part time.  Plus most of my life I have watched the pensions and retirement benefits many companies promised their long term employees evaporating in the midst of our financial downward spiral as a nation.

Of course everybody has the option to buy insurance on the open market…if you can afford it.  Individual policies cost far more than group policies and generally offer less.  And if you’ve ever had any significant health problem they refuse to cover you.  The one time I applied for an individual policy I was denied, and that was before the heart attack and other heart problems.  If the Affordable Care Act survives gutting by the Republicans, insurance companies will no longer be able to deny benefits based on pre-existing conditions starting January 1, 2014.  Another provision of the ACA is the establishment of affordable insurance exchanges for individuals, also in 2014.  There is a helpful website explaining the law at

In the meantime we are stuck in the current system which makes care unattainable for many low to middle income Americans.  I found an interesting series of articles on the New York Times website discussing the insurance issue.  Uwe E. Reinhardt, a Princeton economist, explains how this employment based insurance system came about in his article Is Employer-Based Health Insurance Worth Saving? .  He discusses pros and cons and possible alternatives.  In another article, he makes the case for a public plan available to anybody.  He counters one of the most pervasive arguments against such a plan with a splash of chilling reality.  Reality that I have observed first hand at the bedside over the course of my health care career.

Evidently, many Americans do sincerely believe that when a public health plan refuses to pay for a procedure it is “rationing,” while denial of health care to an uninsured, low-income individual who cannot afford to pay for that care is not. But as textbooks in economics explicitly teach, the role of prices in a market economy is precisely to ration scarce resources among unlimited demands.

The American health system has rationed health care by price and ability to pay all along for a sizeable segment of the United States population. In its report “Hidden Cost, Value Lost,” for example, a distinguished panel of experts convened by the Institute of Medicine of the National Academy of Sciences estimated that some 18,000 Americans die prematurely for want of health insurance and timely medical care. That is rationing life years.

I fervently hope not to become one of those Americans, dying or crippled because I don’t have insurance.

One Comment leave one →
  1. July 12, 2012 12:18 pm

    Looking back at this post, I’m thinking of some things that came up in the press lately.
    The stories about people suffering and dying horrible deaths because of lack of health insurance are mounting in the popular press.

    Whenever I read one of these stories, I think to myself that the “death panels” that Sarah Palin predicted of the Affordable Care Act are actually becoming reality— NOT at the hands of the folks who support the ACA, but at the hands of conservatives and right wing enthusiasts who have decided to let the poor folks just wallow and die.

    Some of us are suffering and some are dying as a result of lack of health care resources. I see a direct and consistent connection with this “rationing of health care movement” that is spearheaded by misguided and misanthropic people with power.

    Time for action. We need, too, to speak up where it matters and let the world know that this is not how rational and compassionate human beings treat one another. Time for values clarification.


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