The health care competitiveness fallacy
E. Thomas McClanahanOne fallacy that still comes up frequently in the health care debate is the idea that employer-provided health insurance hobbles American competitiveness. This has been rebutted frequently but it keeps popping up, most recently in a Fareed Zakaria piece in Time (to which my attention was drawn recently by a colleague).
Zakaria gripes that Obamacare is far from perfect, and one reason is that it maintains the link between health care and work. This, he says, is a “huge burden” on American companies. Businesses in Germany, Canada and Japan don’t have to pay all that money for health insurance, but U.S. companies do.
Nonsense, says Harvard’s Greg Mankiw, a former Bush economist and the author of a popular economics texbook.
Many people forget that health insurance is part of total compensation and compensation is set by the labor market. If health insurance was decoupled from work, companies would still have to shell out roughly the same amount of compensation to draw the labor they needed. But instead of getting insurance from their employers, workers would get more cash income.
Zakaria is on-target in regretting the tie between insurance and health care, but not for the reasons he gives.
Carol McArthur Johnson
1 year, 1 month agoOne of the problems with insurance coupled to employment is that, if you have a pre-existing condition, you are tied to your job. It doesn’t matter how burdensome the job conditions might become, you can’t protest (might be fired) or leave, because you know you won’t be able to get health coverage elsewhere. Also, you have no bargaining power with insurance companies - that is held by employers. Any cost savings goes to them, while premium increases are passed on to workers. Every pay increase received by my husband in the last five years has been consumed by insurance cost increases. So,, we are not even keeping up with inflation for food, gas, etc.
Phil Cardarella
1 year, 1 month agoOnly the USA and China — seeing that they do things one way and the rest of the world does it another — immediately conclude that the rest of the world is wrong. Sorta the downside to exceptionalism.
We constantly refer to our health care system ans the “best” in the world. Hogwash. It is the most technologically sophisticated for those who have access — but by actual effectiveness for the population as a whold barely beats out Slovakia, Embarrassingly (despite our embargos) the average CUBAN gets better health care. Canadians voted the guy who developed their system Th Man of the (20th) Century!
Of course, I love it when the Voice of Business talks about how the then-uninsured serfs would get more money if their overlords did not pay for health insurance. Yeah, right. And there’s a Nigerian Prince waiting to make us all rich, if only…