How Employers Came to Be Main Source of Health Insurance: Time to Lower Their Burden

You probably have health insurance through your employer. How did that become a responsibility for employers? As I explain in a forthcoming research article (quoting for brevity): 

“The economy’s shift from hourly jobs to gigs has much deeper roots than mobile phone technology. The employment relationship began to erode in World War II with wage and strike controls. These government restraints, along with collective bargaining and tax incentives, caused employers to add fringe benefits to offset their inability to raise wages.  Thus began an inexorable rise in employer-paid benefits. Health insurance and pensions  were the most costly “fringes.” By the late 1980s, employers scaled back on these benefits because of spiraling costs.”

In other words, employers couldn’t give worker a raise—so that added “fringe benefits,” such as health insurance.

Today, that cost is so burdensome that it’s fundamentally eroding the basic employment relationship.

So, why not decrease the employer responsibility and put health insurance more on a risk model.

Consider this: “The American Diabetes Association recommends that people should avoid intake of sugar-sweetened beverages to help prevent diabetes.” 

Today, sugar taxes are popping up in some cities; but why not have a national sugar tax that is used for funding access to health insurance and use the money to decrease the employer burden?

Ditto high-fat foods. You want to eat this quintuple patty cheeseburger with fatty fries?

Go ahead—just pay as you go to fund the increased possibility that you will eventually need heart bypass, or blood pressure pills and the like. Or, stop the risky eating habit, improve your chances for being more healthy, and lower your risk for drawing on health insurance-- and avoid the tax.

And by the way, even with steep taxes on cirgarettes, the Centers for Disease Control (CDC) and Prevention noted in 2015, “The percentage of U.S. adults who smoke cigarettes declined from 20.9 percent in 2005 to 16.8 percent in 2014. Cigarette smoking was significantly lower in 2014 (16.8 percent) than in 2013 (17.8 percent).” 

That’s still a lot of smokers! Add another tax, please, and dedicate it to a national health insurance fund.

In other words: If employers don’t do anything to add to our risk for bad health and costly treatment, why are they always on the hook for health insurance? Pick a few risky behaviors that add up to a lot of costs; and let the people who enjoy these risky and purely voluntary behaviors begin to pay a greater share of the risk they are asking employers to subsidize.