Half of all Americans receive their health care benefits through their employer or their spouse’s employer. This is a system that has been in place since 1943 and is somewhat unique to the U.S. It began during WWII when employers, faced with wage and price controls, needed a way to compete for new employees.
The federal government allowed employers to provide employee health insurance and further allowed them to deduct the cost of that insurance from their company income tax. This was the beginning of employer-paid health benefits and has become a fixture in the U.S. health care delivery system.
Employers might argue that they want a healthy workforce. Yet they don’t provide other necessities of a healthy life, such as food, shelter, and clothing, for their employees. Except for the historic tax policy, there is no reason most employers would be in charge of employee health benefits.
As the cost of insurance premiums has risen and as the alternatives to employer-paid insurance have decreased, many employees have found themselves trapped in their jobs simply because of the health benefits. This has created what’s called job lock.
Single-payer progressives have used this job lock phenomenon as another reason to support nationalized health insurance. (here) If everyone is in a “Medicare for All” insurance plan, they could move from job to job without the worry of losing their health benefits. Interestingly enough, eliminating job lock is one area where free market supporters agree with socialized medicine advocates.
Just like in other economic areas of life, patients should be allowed to control their own health care dollars and make their own health care decisions without a disinterested third party’s involvement – either employers or the government.
Congress should change the federal tax code and let individuals deduct their health expenses from their taxable income, just as businesses do. This would give employees the freedom to purchase their own insurance and would allow employers to decrease their overhead and offer higher wages. There is no reason tax policy should drive health care policy in the U.S.
Individual insurance coverage, not tied to employment, would end the effect of job lock by allowing people to keep their health care coverage as they move from job to job, and from state to state. Why not simply adjust wages upward and allow employees to buy their own individual plans? This would end third-party payer distortion and would put workers directly in charge of managing their health care costs.
The government created the problem of job lock. More government through a single-payer system is not the solution.
