Why aren’t US businesses more supportive of single-payer healthcare?
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Brandon Haase, a Marketplace auditor in Short Hills, New Jersey, asked:
With healthcare costs still rising for American businesses and workers, why don’t we see greater support for a single-payer healthcare system from the corporate world? It seems to me that American companies are at a disadvantage compared to foreign competition that does not have to provide health care to its workforce.
The United States has the most expensive health care system in the world. In 2019, healthcare spending reached nearly $ 4 trillion, according to the Centers for Medicare & Medicaid Services.
Medicare for All, a single-payer healthcare proposal, has recently gained popularity in the United States, backed by progressive lawmakers like Vermont Senator Bernie Sanders and Massachusetts Senator Elizabeth Warren.
In a single-payer health care system, only one entity – likely the government – pays the medical bills, as opposed to the people who have to pay the medical bills through their employer or the open market.
A 2020 study in the journal PLOS Medicine found that a single-payer healthcare system would save money for the United States or individual states over time. The savings resulting from simplified payment administration and lower drug prices, among other mechanisms, ranged from 3% to 27% in the first year, depending on the researchers’ business models.
Employers ended up paying 67% of medical premiums for family coverage plans in March 2020 and contributed an annual average of nearly $ 14,000 per family, according to data from the Bureau of Labor Statistics.
Despite the cost of health care, our current system is beneficial to some businesses. Chad Stecher, assistant professor of health economics at Arizona State University, said big tech companies like Amazon or Facebook can attract star talent by delivering compelling benefits, including healthcare.
“It is in their best interests to preserve this advantage over nascent companies which will certainly not be able to compete with them for health insurance,” said Stecher.
William Hsiao, professor emeritus of economics at Harvard TH Chan School of Public Health, said industries employing younger workers, such as the tech industry, are more likely to oppose pay-for-pay health care unique because the health insurance premiums of these workers tend to be lower.
With the single-payer system’s flat payroll tax, Hsiao said, industries will likely end up paying more than they currently do.
To get a feel for this: A California Senate committee found in 2017 that a single-payer plan in the state would cost $ 400 billion a year, which could be paid for with a 15% payroll tax.
Another reason some companies oppose a single-payer system is simply ideology, Hsiao said – many believe the government should just “stay out of it.”
Then there are the companies without a single payer position, which Hsiao says are in the majority. Hsiao said these companies believe they have nothing to gain from the implementation of the system – that workers would likely demand a higher salary if the company did not cover their health insurance.
A single-payer system could also have some advantages for businesses. “Health insurance is a negotiating nightmare for everyone. Employers are no exception, ”Stecher said. “Our system forces everyone to become experts at some level in this area, which is, frankly, a waste of time for most companies to think about.”
Some American automakers, such as General Motors Corp., have said they are at a disadvantage compared to foreign companies, as auditor Brandon Haase pointed out.
“The cost of health care in the United States makes American businesses extremely uncompetitive with our global counterparts,” said GM President and CEO G. Richard Wagoner, Jr., in 2005.
While large companies have generally refrained from making an explicit and public advocacy for a single-payer healthcare system, there are CEOs of small businesses who are voicing support for this system. The Business Leaders for Health Care Transformation coalition, for example, supports a healthcare system that covers everyone “regardless of income, background or professional status”.
Members include executives from companies like Ben and Jerry’s; MCS Industries, which supplies frames and wall decorations to retailers; the Alchemist Brewery; and MicroTrap Corp, an air filtration equipment manufacturer.
Jen Kimmich, managing director and co-founder of Alchemist Beer, said managing health insurance costs for its employees is one of the company’s biggest challenges.
“I think businesses are just starting to realize how much of a drain this is,” Kimmich said. “For us, if we could focus on our business and not spend so much time and money navigating health insurance, we could just invest more in our community and our business and everything in between.”
Kimmich added that many of his employees, worried about going to the doctor because of what insurance policies don’t cover, use insurance less. “Co-payment, prescription drugs, everything. There are so many things that are not covered.
Kimmich said the company provides comprehensive health insurance coverage to its employees through Blue Cross Blue Shield of Vermont. Alchemist Beer currently has 42 full-time employees, of which approximately six are part-time. (Before the COVID-19 crisis, 50 worked full time). In total, she said, the company pays about $ 350,000 per year for health insurance for all of its employees.
She is in favor of a Medicare-for-All-type program, which she says could cover all of these costs, as well as dental and vision care.
David J. Steil, CEO of MicroTrap Corp. and a former Republican member of the Pennsylvania House of Representatives, also supports a single-payer system.
“I have two motivations: one is to get out of the healthcare business. I don’t think it’s our responsibility. It harms the nature and mission of our businesses, ”said Steil. “Number two is: I have come to realize that everyone should have health care. In all circumstances, everyone should be covered in one way or another.
Steil said business leaders for healthcare transformation chat with business people all the time and the one-time payment has been a hard sell because they are wary of the government. But, he pointed out, the government already provides half of health care in this country when you factor in programs like Medicare and Medicaid.
“Our prejudices and ideologies prevent us even from considering it,” he said. “And this is the biggest fight we have to overcome.”