It's the biggest domestic issue in the 2008 presidential contest, and everyone is feeling its pinch -- including General Motors: What to do about the rising costs of health care? Answer: Follow GM's lead, and decouple health care from employment.
GM isn't the only big company to stop insuring the health of its employees. According to a recent survey by the Kaiser Family Foundation, in just the last seven years the portion of firms offering health benefits has dropped from 69 to 60 percent. Even among workers who still get them, benefits are getting stingier. Last year, 38 percent of workers had to pay deductibles of $500 or more -- that's up from 14 percent in 2000. Meanwhile, co-payments and premiums are soaring. In other words, the whole system of employer-based health care is unraveling.
Why? Because in an ever more competitive global economy, companies can't afford its rising costs, and their shareholders don't want to face its increasing risks and uncertainties.
Even from the standpoint of workers, the employer-based system makes less and less sense. Most people don't spend their careers with the same employer anymore; they move from job to job -- which means they lose coverage between jobs when they and their families are especially strapped. And a growing number aren't even tied to a particular employer, anyway.
I say let's just scrap the employer based system altogether. Use the 200 billion dollars or so of annual tax deductions the system now relies on (for employers and employees) to help lower-income Americans, who aren't poor enough to qualify for Medicaid, afford basic health insurance. And then allow anybody who wants to reduce their health-insurance costs to join them -- along with the retirees , government workers, and poor, all of whom are now in government-organized health care plans -- in a SuperMedicare plan that would have so many members it could negotiate with drug companies, suppliers, and hospitals for bargain-basement rates.
It's win-win-win. Employers no longer pay rising health-care costs. Employees get affordable health insurance even when they're between jobs or have no steady employer. Nobody loses any options they now have. The only losers are the big insurance companies, hospital chains, and drug companies. Seems like a small price to pay, doesn't it?
This column is adapted from Reich's weekly commentary on American Public Radio's Marketplace.
