Since consumers don’t pay for h/c directly, they have little reason to pay attention to its cost; a $20 co-pay does little to sensitize me to the fact that the overall cost of the office visit, procedure, test or prescription has doubled. Whenever the consumer is not the funder, you get price increases. Because employers pay the overwhelming share of insurance premiums, employers (not consumers) are the carriers’ clients. The combination of these two factors guarantees increasing demand for services by consumers ignorant of, or unaffected by, their cost, and increasing cost due to carriers passing along increases to employers who are not in position to decline. Employees in Corporate America have had employer-based h/c too long to give it up; there would be a national uprising against any employer with the temerity to cancel health plans. Also, corporate executives want to keep their health coverage, and federal law requires them to maintain a minimum ratio between what they give themselves and what they offer to the employees. They can’t take employees to zero coverage without doing the same to themselves — which isn’t going to happen. As a result of the perverse relationship between these three forces, employers have no real price negotiation leverage with the carriers who, while perhaps not actively colluding, are nonetheless a consolidated industry offering only a few competitors who have little incentive to break ranks meaningfully on price.

As another poster correctly observed, distributing increasingly-hard-to-get h/c through employers yields the unintentional consequence of a form of indentured servitude for anyone with a significant pre-existing health condition. Because they will be turned down for participation in any new employer’s plan, exposing them to unacceptable financial risk, in practical terms they have to keep working for their current employer.

Insurance simply is not the proper financing vehicle for daily h/c expense. Insurance exists to spread catastrophic risk among a large population, not to finance day-to-day or recurring expense. The h/c model, analogized to homeowners’ insurance, would result in people getting reimbursed for faucet repair, broken windows, cracks in the driveway, etc. That’s not what it’s for, and not what health insurance should be for. Any insurance component of a h/c finance plan should be limited to catastrophic expense, e.g., major surgery, extended hospitalization, extensive diagnostic testing in cases of rare diseases. Doctor visits, checkups, care for minor conditions such as flu, earaches, etc. should come out of consumers’ pockets directly, just as mundane household expenses and repairs do.

But I respectfully and wholeheartedly disagree with employee based healthcare. I think we need to separate health and our employers. It stifles creativity and entrepreneurship as people stay in jobs/marriages/bad decisions because of the ‘benefits’ (perceived or real). Thus production is down, innovation is down, morale is down and the country continues to go on a downward spin. Health care is currently 17.6% of the GDP of the US. How amazing would this be if this was refocused on innovation and education _currently Education represents 4.8% of the GDP ranking 10th in the world…below Saudi Arabia, Norway, Malaysia, South Africa and France.

Certainly health education needs to play a more substantial role – why are Americans so sedentry/supersized/diabetized etc…?

Please take a listen below. These two entertaining and informative radio shows aired the last two weekends, I think they really touch on some good issues that the mainstream [fox] media and big lobbyists are purposefully avoiding. What I found most interesting is HOW the EFF we got this system in the first place!

http://www.thisamericanlife.org/Radio_Episode.aspx?sched=1320
http://www.thisamericanlife.org/Radio_Episode.aspx?episode=392

In a radiance of good health /L

As far as I know such a radical simple solution was tried in France when they forced the 35 hour workweek on the employers. Mathematically that would have solved the unemployment.
It only made things worse…