Sam Rasoul | U.S. business, big and small, hurting because of our current health-insurance system

The practice of work-related health insurance began as a way for employers to get around the wage controls of the Second World War. The idea worked then, providing companies a way to attract the best workers in a time of labor shortage.

Today, though, corporations find providing health insurance for their employees too costly. Since 2000, health-insurance premiums have risen 87 percent. The average employer-based premium for a family is more than $11,000 (more than a minimum-wage worker can earn in a year). Faced with such exorbitant premiums, employers have felt the pressure to switch to plans with high deductibles for their employees or to eliminate health plans entirely. They also have had to cut jobs. Chrysler announced it would close two factories and do away with 13,000 jobs to reduce their health-insurance costs.

Some companies, General Motors, for example, have cut benefits but still find their costs so high they cannot compete in today’s global economy. Their very existence is in danger. Ford Motor Co. carries insurance on 570,000 people, including past employees and current employees and their dependents, spending $3.5 billion last year. Those costs add $1,200 to every vehicle they produce, creating a serious disadvantage in competing with companies in countries with a national health-insurance plan. Beyond any doubt, high insurance costs hurt American industry.

Small businesses that offer their employees health insurance suffer also. Some businesses face 50 percent premium increases yearly. In order to cover exorbitant health-insurance expenditures, they often cut staff in order to keep the business running. Cutting staff, though, means more responsibility and more stress for the remaining workers. Small businesses that do not offer insurance have a profit advantage over those that do, but because of the disadvantages around hiring and retaining reliable, good workers, they too want to fix our broken health-care system.

With both big and small business, the money spent on health insurance is money not spent on growth, innovation, or higher wages.

A single-payer system, such as HR 676, Improved Medicare for All, will benefit business in general. The plan will contain and stabilize costs and eliminate the waste generated by the for-profit system (which I will examine in another article) while providing health care for everyone. Costs for employers would drop dramatically and benefits would improve. Those lower costs would go into profits, profits that could be used for capital improvements or adding more employees or improving salaries. With everyone insured, business could expect healthier employees and higher productivity, less absenteeism, and lower employee turnover. United States business could once again be competitive.

 

Column by Sam Rasoul


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