Employer-provided health insurance - a "Dead Idea"
Why are Americans so stuck on the idea that they should receive their health insurance from their employer? Is it because that’s the way they’ve always done it? Or is it because they've been told that the only alternative to our current system is socialized medicine, which they associate with long lines and limited choices? A little research will tell you that isn't true.
The idea that “your company should take care of you” is one of author and Center for American Progress fellow Mark Miller’s six “Dead Ideas.” He describes these ideas as a set of “tacit assumptions and ingrained instincts" that business and policy leaders cling to "regarding the way a wealthy, advanced economy like the United States should work." The problem is, what worked sixty to eighty years ago isn't going to fly these days. Some of our ingrained ideas are outdated and need to be changed to reflect how the world works today.
In his fascinating book, The Tyranny of Dead Ideas, Miller explains how employer-provided health care came to be the norm in America. He insists that our national leaders shake free of this destructive Dead Idea so that American businesses can compete fairly with foreign businesses not operating under this burden.
According to Miller, in the early twentieth century, large, profitable industries, like steel and rail started offering their employees benefits in order to discourage labor strikes. Organized labor went right along with this idea because, at that time, they were ”deeply mistrustful of government.”
After World War II, the business community’s fear of European socialism motivated even more businesses to offer their employees generous benefits, which they were able do at a much lower price than they can today. Businesses believed that if they offered their employees benefits instead of the government, they were resisting the “socialist threat.”
Unfortunately, the generous benefits that companies could afford in the twentieth century are undercutting businesses’ bottom line in the twenty first. In his book Miller writes:
But corporate America isn’t the only one clinging to a Dead Idea. One line of Miller’s book rings especially true in light of our debate over health care reform. After negotiating the ground-breaking 1950 United Autoworkers-General Motors labor contract that expanded workers’ benefits, UAW president Walther Reuther next wanted the country to move toward government-provided, universal health coverage. The problem was he, "found it hard to mobilize the beneficiaries of the private welfare state he had helped erect on behalf of similar gains for others."
In other words, nothing has changed. In 1950, the people who received employer-based health insurance, like the United Autoworkers, weren’t motivated to change the system that worked for them in order to benefit those without coverage. Today, most working people with health insurance get it through their employer. Most of these folkcs aren’t willing to jeopardize their comfortable situation by changing the system to benefit those without insurance.
Congressional Democrats and President Obama managed to pass significant health reform last month despite the fact that America’s leaders and workers are still operating under the Dead Idea of a paternalistic employer. That was quite a feat. Let's acknowledge that this model is going the way of the leisure suit and the gas guzzler. In the future, government must be more involved in providing basic human services like health care, so we can let business get down to the business of making products, services and money. It’s what they're good at.
The idea that “your company should take care of you” is one of author and Center for American Progress fellow Mark Miller’s six “Dead Ideas.” He describes these ideas as a set of “tacit assumptions and ingrained instincts" that business and policy leaders cling to "regarding the way a wealthy, advanced economy like the United States should work." The problem is, what worked sixty to eighty years ago isn't going to fly these days. Some of our ingrained ideas are outdated and need to be changed to reflect how the world works today.
In his fascinating book, The Tyranny of Dead Ideas, Miller explains how employer-provided health care came to be the norm in America. He insists that our national leaders shake free of this destructive Dead Idea so that American businesses can compete fairly with foreign businesses not operating under this burden.
According to Miller, in the early twentieth century, large, profitable industries, like steel and rail started offering their employees benefits in order to discourage labor strikes. Organized labor went right along with this idea because, at that time, they were ”deeply mistrustful of government.”
After World War II, the business community’s fear of European socialism motivated even more businesses to offer their employees generous benefits, which they were able do at a much lower price than they can today. Businesses believed that if they offered their employees benefits instead of the government, they were resisting the “socialist threat.”
Unfortunately, the generous benefits that companies could afford in the twentieth century are undercutting businesses’ bottom line in the twenty first. In his book Miller writes:
In aggregate, American employers now spend roughly $600 billion on health care and $200 billion on pensions, costs that no other advanced nation imposes on its companies. It’s crazy but true: Starbucks spends more on health care than on coffee; General Motors spends more on health care than on steel.Why would corporate America defend this system? Their position is irrational. And it’s destructive.
But corporate America isn’t the only one clinging to a Dead Idea. One line of Miller’s book rings especially true in light of our debate over health care reform. After negotiating the ground-breaking 1950 United Autoworkers-General Motors labor contract that expanded workers’ benefits, UAW president Walther Reuther next wanted the country to move toward government-provided, universal health coverage. The problem was he, "found it hard to mobilize the beneficiaries of the private welfare state he had helped erect on behalf of similar gains for others."
In other words, nothing has changed. In 1950, the people who received employer-based health insurance, like the United Autoworkers, weren’t motivated to change the system that worked for them in order to benefit those without coverage. Today, most working people with health insurance get it through their employer. Most of these folkcs aren’t willing to jeopardize their comfortable situation by changing the system to benefit those without insurance.
Congressional Democrats and President Obama managed to pass significant health reform last month despite the fact that America’s leaders and workers are still operating under the Dead Idea of a paternalistic employer. That was quite a feat. Let's acknowledge that this model is going the way of the leisure suit and the gas guzzler. In the future, government must be more involved in providing basic human services like health care, so we can let business get down to the business of making products, services and money. It’s what they're good at.
# Posted by Kathleen : 5:24 PM
Comments:
Don't forget about the economics of health care. In every age demographic, 5% of the population accounts for 50% of the costs, and 15% for 85% of the costs. That means that the 85% healthy majority is comfortable with employer-provided insurance only because they are utterly ignorant about what would happen if they got sick. 75% of medical bankruptcies happen to those with insurance, after all. They know as much about their insurance as they know about how well their fire extinguishers work, which is to say diddlysquat.
It's going to take awhile before people realize that nothing much is going to change after "reform" is that their premiums and copays are going to continue to skyrocket.
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