Monday, March 19, 2012

How About That Health Insurance?

Paul Krugman links to a study which shows a big drop on the number of people who have health insurance from their employers. Most of that is due to the loss of jobs in a recession, but the drop also shows the vulnerability of a system which is based on employment. As Krugman notes:
What this says is that the system that has provided workable insurance coverage to many (but not enough) Americans is coming apart at the seams. And this in turn means that if health reform goes down, we’re going to be looking at a wave of misery spreading across the land.
The employment-based aspect of health insurance has never been as generous to those who have jobs with lower pay. But if firms can pick and choose the way they can now, we are all going to be at the mercy of the employers' moral and other values when it comes to health insurance.

The market-based alternatives to job-linked group plans are more expensive because they are not group plans and because the sellers of those have been able to exclude people or charge higher premia based on existing health problems. Combine that with the need for such policies being greater for the lower earners (both because firms are less likely to offer health insurance in such jobs and because small firms, also less likely to afford health insurance, have more low-pay employees), and you get a situation where the feasible alternative for many working families is not to buy insurance at all, assuming that they don't qualify for Medicaid.