A business case for universal healthcare

The majority of Americans obtain their health insurance through their employment. Business has a vital concern in the financing of healthcare. A recent report adds to the plethora of evidence that business owners would be better off if they were relieved of their responsibilities of providing health benefit programs for their employees.

So why is there not an outcry to switch to a proven financing system that would serve their employees well? Is it ideology? The Affordable Care Act (ACA) calls for a financial penalty for larger employers who do not provide healthcare coverage for their employees. Could that be the reason? No, the resistance to change existed before ACA was enacted. Further, there are now so many experts in the policy community across the political spectrum who are calling for repeal of the penalty that it is likely that it will be eliminated anyway.

If so, what are employers likely to do? We are already seeing much interest in private health insurance exchanges. If ACA requirements on employers were lifted, they may be willing to provide their employees with a voucher to purchase plans in the private exchanges. Since that converts the benefit into a defined contribution, that would pass on to their employees the burden of future healthcare inflation.

Another possibility is that they might want to give their employees raises and then let them select their own plans in the state-based ACA exchanges. That would remove the employer entirely from the responsibility of supporting a health benefit program.

A concern that employers might have is that healthcare costs are now too high and income inequality has increased to the level such that healthcare benefits must be progressively financed if people are to receive the care they should have. Employers could be concerned that their tax burden may be increased to pay for the higher subsidies that will be needed for premiums and cost-sharing in the exchange programs. Not knowing what that tax burden might be could cause some reluctance to change from a system that at least they understand.

Most employers are well aware of the inefficiencies and high costs of our private insurance-based system. Would employers be ready to embrace a more efficient government-financed and government-administered single payer system? This may be their greatest fear because the financing would no doubt be through explicit progressive tax policies. Most proposals would reduce total health spending for 95 percent of us, but would increase it for those in the top 5 percent of income.

Although some in the business community might be opposed simply because of ideology, for most it’s the money. We’ve learned the lessons that Thomas Piketty has for us, but we can’t apply them until we are willing to exercise democracy by changing the politics. That push for change will not come from the business community.

Don McCanne, MD, is senior health policy fellow at Physicians for a National Health Program. His widely read "Quote of the Day" commentaries on topical health policy issues can be found here. He lives in San Juan Capistrano, Calif.