GOP healthcare alternative? It’s pretty flawed, too
Ugh. So House GOPers have put out their alternative to ObamaCare. It’s really more of a statement of principles with a few numbers. Yes, it is a good idea to level the playing field between those who get their insurance through their employers and those who buy it on their own. But this is the part that put me back on me heels:
Strengthens employer-provided health coverage by helping the 10 million uninsured Americans who are eligible, but not enrolled in, an employer-sponsored plan get health care coverage. The plan does this by encouraging employers to move to opt-out, rather than opt-in rules.
Employer-based covering should be scrapped, not strenghthened. (In fact, doing so really is key to reform.) The great Arnold Kling gives five good reasons why:
- The cost of health insurance is disguised from consumers, because firms do not report what they pay in premiums. Workers are under the illusion that their health coverage is inexpensive, and if they subsequently find themselves having to obtain their own health insurance, they are offended by the cost and instead choose to go uninsured.
- Workers who are concerned about the availability of health insurance may suffer from “job lock.” They might wish to leave their job for self-employment, pursuit of formal education, an opportunity with a smaller firm, or early retirement, but the potential loss of health insurance is a deterrent.
- Workers may not enjoy the range of insurance choices that they would have if health insurance were not negotiated for them by employers. For example, if they could choose their own insurance, some workers might elect coverage with higher co-pays and deductibles but lower premiums, in order to have more cash income.
- Because employer-provided health insurance is subsidized through the tax system, the benefits accrue relatively more to high-income workers.
Workers who are fired or laid off can find themselves without health insurance at a point where they can least afford to be uninsured.