Free business from health costs
By Register Editorial Board
Des Moines Register
September 9, 2005
First the bad news: Health-insurance premiums in Iowa increased an average of 12.4 percent from 2004 to 2005. Now, more bad news: Employees are paying higher premiums and deductibles. A family’s out-of-pocket maximum increased. So did the average cost for an office co-payment. So did the co-pay for prescription drugs.
The good news? Sorry, there isn’t much when it comes to the cost of health insurance.
These results are taken from the 2005 Iowa Employer Benefits Study conducted by David P. Lind and Associates and Data Point Research. More than 700 employers responded to the survey. Most reported rate increases.
When companies pay more for health insurance, employees pay more. Yet it’s hard to blame the companies. They’re simply caught in the middle of an employer-based health-care system that ties jobs to insurance. It’s the only model of its kind in the world, and it doesn’t work. It leaves businesses looking like the bad guys, when most businesses want to do right by their workers.
Consider how an employer-based system began: During World War II, wages were frozen, and labor was in short supply. Employers enticed workers with health-care benefits. What started as a job perk has become an expectation – and a huge financial burden on business. That’s bad for businesses and bad for the economy.
So what can businesses do now? Lobby Congress to shift the burden to a government-sponsored system or expand an existing government program such as Medicare, the tax-financed system of health care currently available to seniors and the disabled.
Imagine the Medicare option. Businesses could choose between keeping private-sector insurance for their employees or paying to cover them through Medicare. Employees also could pay into this system and even purchase supplemental coverage. Medicare has low administrative costs, so coverage likely would be cheaper for companies and employees.
It would be good for Medicare, too. Adding younger, healthier people and their dollars would spread the risk and minimize costs.
Good for the government. Good for workers. Good for business. That would be good news.