World in Motion

by Matthew Stollak on Tuesday, June 14, 2011

I serve on the Benefits Advisory Committee for our school.  We meet weekly to discuss many of the aspects of our benefits plan, and I would say that 80-85% of our time is spent on health care and its related issues: switching providers, amending the dental plan, looking for cost savings.   Our benefit administrator spends significant amounts of time dealing as well with employee interaction with that plan.

So, it was interesting to read the news that the flawed McKinsey study that argues 30% of employers wil drop health insurance by 2014 ( for some discussion of the problems with the McKinsey study, click here and here).  It got me to thinking, why are employers in the health care business?  Given how much time, energy, and resources our HR Department spends, is the competitive advantage of providing it to attract applicants worth the effort?

Further, why are employers opposed to a single payer or Medicare-for-all system? Wouldn't HR be freed up to handle more employee performance and strategic issues instead of spending all the time dealing with insurance companies?  Wouldn't employees be more productive instead of fretting over filling out yet another flexible spending account reimbursement form?

I understand the cost implications of it, but what would be the disadvantage(s) purely from the standpoint of operating your business?

Thoughts?

2 comments

I get why some folks oppose it in business. They feel they can control their cost level better than the government could do for them.

Which would have been fine, say, 20 years ago when health care costs were just dandy. But other than certain commodities, nothing has risen faster in cost than health care. It would be insane for a business not to at least consider dumping their plan. They may elect to keep it for multiple reasons but to not consider it?

For employees too, I don't get the opposition to decoupling health care from employment. Certainly it has depressed take home wages (along with other factors of course).

Now I guess there may be a debate on how it becomes disconnected from employment (whether it is single payer, individual plans, or some sort of hybrid system) but I honestly don't get the insistence on tying health care to a job.

by Lance on June 14, 2011 at 11:51 AM. #

Great questions, needing institutional and government discussion.

In the long run, we will all be on some version of Medicare/Medicaid that we pay into as a federal tax, which will be a progressive one based on income, as well as choosing to pay for an additional plan based on age and circumstances. For example, younger persons would likely wish to pay for obstetric care in a menu of options and older person long term medical care.

Discussions of retirement/pension plans are likely to be similar. We in university systems with TIAA-CREF plans having a great variety of options to choose from, and ability to change over decades of employment, is a good model.

by Anonymous on June 15, 2011 at 6:31 AM. #

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