Healthcare and Me (And You)
| Tue May. 26, 2009 5:20 PM PDT
Over at the Washington Monthly, Jonathan Gruber writes that universal healthcare would create more fluid job markets and spur entrepreneurship:
The main reason for this is a phenomenon known as "job lock," a term coined during the last round of debate over universal health coverage in the early 1990s. Job lock refers to the fact that workers are often unwilling to leave a current job that provides health insurance for another position that might not, even if they would be more productive in that other position. This is because employer-provided insurance is traditionally the only reliable form of fairly priced private insurance coverage available in the U.S.
....[Alison] Wellington estimates that universal health care
would therefore likely increase the share of workers who are self-employed (currently about 10 percent of the workforce) by another 2 percent or more. A system that provides universal access to health insurance coverage, then, is far more likely to promote entrepreneurship than one in which would-be innovators remain tied to corporate cubicles for fear of losing their family’s access to affordable health care.
That's true. Take me. Suppose I wanted to quit my job and write a book. The first step would be for me to have a book in mind that I wanted to write — which, unfortunately, I don't. But say I did. Would I leave MoJo to do it?
Probably not. I've never shopped around for an individual healthcare policy, but my guess is that despite my general good health, I'd get turned down simply for being over 50 and having high cholesterol. And without health insurance, I really couldn't afford the risk of being self-employed.
It's true that this is a moot point until I have a burning desire to spend full time writing a book, but you never know. Maybe someday I will. It doesn't matter, though, because that book will probably stay unwritten no matter how good it might be, since I'd have to give up my health coverage to write it. Pretty stupid system we have, isn't it?
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Comments
Don't forget COBRA
Submitted by msoliver (not verified) on Tue May. 26, 2009 5:35 PM PDT.
Kevin,
I believe you have it wrong. Typically, people who are currently covered by their employer but want to go out on their own and get self-coverage don't have to shop for insurance. All they have to do is wait until their COBRA expires - that is, pay for your previous employer's insurance for 12-18 months yourself and then you are eligible for HIPPA coverage offered by most major insurance companies (it's mandated by law). This type of coverage has no health screening - it just requires you to have no gaps in your coverage and your COBRA coverage expiration. You could get cheaper insurance by shopping around, but this type of coverage generally isn't that much more than what your employer pays for you.
HIPPA?
Submitted by dr2chase (not verified) on Tue May. 26, 2009 5:54 PM PDT.
I've never heard of such a thing, and I've had two kids born under COBRA. Can you provide a hair more information? Is this new(ish)?
Note also that COBRA for a family is plenty expensive. In general, the way non-group medical insurance works is that if you give any indication that you might need it (say, because you ask for a policy), then you are probably a poor risk, and therefore should pay a high premium.
HIPPA Some Small Relief
Submitted by scott1959 (not verified) on Tue May. 26, 2009 7:05 PM PDT.
HIPPA allows for pre-existing conditions rules to be waived if you have been covered under a plan for 12-18 months. Essentially for every month you have been covered, a month of pre-existing conditions rule is waived. However, HIPPA does NOT preclude medical underwriting. So what the insurance companies do is simply not issue the policy. HIPPA offers very little relief.
If your kids are healthy, you could move them off COBRA onto a private policy and save money.
But the insurance companies are picky in their underwriting. For example, my wife is quite healthy but has migraines. She was denied coverage. I am very healthy but am bipolar, stable for the last 20 years. I applied for a policy WITHOUT mental health coverage and was denied because I am bipolar, even though the policy would not pay for any expenses for that anyway.
Nationally about 30% of people who apply for individual coverage get accepted.
Cost for HIPPA Policy was 2x COBRA for me in 2003
Submitted by LarryB on Tue May. 26, 2009 7:48 PM PDT.
In 2003, I had COBRA from a former employer run out. I was trying to start a small business and had to waste a bunch of energy shopping for insurance. Because I'm 30 pounds overweight and have seasonal allergies, I was denied by everyone. (This was in Northern CA - I lived in San Mateo County and worked in San Francisco.) I was in my late 30s at the time.
My COBRA was $265/mo. The HIPPA policies were all upwards of $500/mo, and had much more limited coverage.
Fortunately, I was able to appeal the denial by Kaiser, and was able to get a policy with reasonable coverage for a bit over $200 per month. (When I turned 40, the premium doubled, FWIW.)
In the end, I shut the business and got another cubicle job, in part because of the access to health insurance.
So HIPPA provides access to something, but it's expensive and not very good. Buying a policy as in individual can work, but won't in many markets. We really DO need comprehensive health care reform, and we need it now.
Yes and No
Submitted by Anonymous (not verified) on Wed May. 27, 2009 4:36 PM PDT.
Yes, this is what will happen when our COBRA runs out next month - we will go from $240 a month for the two of us to $1475 a month for the two of us for the same policy. The company tells us it's because we go from a larger pool of active employees to a much smaller pool of laid-off and early retirement employees.
So, yes, we can get coverage via HIPPA - we just can't afford it. And we haven't been qualified for a private insurance company.
Can't afford it? Then
Submitted by E.D. Kain (not verified) on Fri May. 29, 2009 11:08 AM PDT.
Can't afford it? Then surely the $5000 tax break for purchasing your own health insurance - as McCain suggested during his presidential bid - would have been a perfect solution! Let's se $1475 a month for 12 months...that's $17,700 a year. Yeah, $5000 should cover that no problem...
Not so stupid . . .
Submitted by Mike (not verified) on Tue May. 26, 2009 5:37 PM PDT.
if you run a company and want to minimize employee turnover that you don't control. Notice how few big corporations are screaming for healthcare reform?
My experience with personal policy hunting
Submitted by Linkmeister (not verified) on Tue May. 26, 2009 5:47 PM PDT.
here. I've been self-employed for ten years, paying my own premiums. In that time I've seen the monthly premium go from $140 to $344, and so I tried to get a different policy which would reduce the premium and the co-pay.
See what happened in the post at that link. It's a short 5-6 sentence read.
Oh, Kevin -- you could get
Submitted by Tilli (MojaveDesert) (not verified) on Tue May. 26, 2009 6:03 PM PDT.
Oh, Kevin -- you could get health care. Pay through the nose and you're good to go!
preexisting conditions are harsh
Submitted by neutrino23 on Tue May. 26, 2009 6:17 PM PDT.
I've known of people with preexisting conditions or with spouses with serious health issues. Very hard for them to move to another policy. For that reason they kept jobs even though the employer moved to an undesirable location.
Entrepreneurship data...
Submitted by Greg in FL on Tue May. 26, 2009 6:56 PM PDT.
I took a look at a huge report on entrepreneurship across countries (though focused on European countries) and it suggested that entrepreneurship was multi-causal. One thing did stick out, though:
"...EU countries, as a consequence of their relatively generous social security, the unemployment rate was not found to have the expected positive influence on the level of entrepreneurship."
That is, the entrepreneurship rate doesn't change much as the economy fluctuates where there is a safety net. Curiously, certain countries like Norway had entrepreneurship rates close to the US (about 10%). For this study, entrepreneurship was defined as the fraction of the labor force operating a business of less than 42 months age. The character of entrepreneurship is somewhat different in Europe than in the US, with more self-employment there. Also, US firms are on average "younger" than European counterparts - the overall business ownership rate is over 11% across Europe, whereas the entrepreneurship rate was more like 5%-9%, with a lot of variation country to country.
Many Asian countries have higher entrepreneurship rates than the US.
Job Lock
Submitted by scott1959 (not verified) on Tue May. 26, 2009 6:59 PM PDT.
Reuters had an article today that suggested that the percent of the workforce 'locked' due to health insurance could be as high as 20-50%.
It's interesting that the
Submitted by JS (not verified) on Tue May. 26, 2009 7:15 PM PDT.
It's interesting that the increased availability of health care brings with it reduced career opportunities. If Homer, Virgil, Dante, Shakespeare, Joyce, Hemingway had been faced with the same dilemma, how many of their books might not have been written?
On the other hand, Einstein was able to revolutionize physics while keeping his day job, so Kevin might be able to write his magnum opus while at MJ. (What about a book of essays that he has already written?)
health care is FREEDOM
Submitted by rcrews (not verified) on Tue May. 26, 2009 8:02 PM PDT.
I've been posting this for years - that National Health Care is about Freedom! Freedom to marry whomever you choose, without worrying about the financial costs. Why should I, at 60, marry someone my age and have two financial futures endangered by one person? How can a person quit a job to care for a loved one if their insurance goes with it? How can a person go back to school or retrain if the have no safety for their future?
COBRA doesn't exist if the company you worked for folds. COBRA is about extending an existing coverage that you have left - if the company folds, it's GONE!
CAL-COBRA extends COBRA for another 18 months, but the company has to be in CA. I was laid off, in CA, from a Mass company, and CAL-COBRA could not apply. When right-wingers want interstate insurance buying, they don't understand these things. And if they think a cheaper Kentucky policy will stay cheap covering somebody in CA - they're just ignorant.
It's not just healthcare
Submitted by MaynardHandley on Tue May. 26, 2009 8:04 PM PDT.
Everything you say is just as true for encouraging people to own houses rather than rent. And it's not as though encouraging housing bubbles has such great spillover effects on the rest of the economy.
"Pretty stupid system we have, isn't it?"
Wake me up when Congress makes serious moves to end the funneling of money upwards that is the web of home-ownership special pleadings in this country.
Job Lock is Feudalism
Submitted by Anonymous (not verified) on Tue May. 26, 2009 8:48 PM PDT.
When your life circumstances depend on a a relationship of fealty to your employer you are a serf. Why, Merkans, do you put up with this situation? Now in my 5th decade of public universal single payer medical care, I cannot understand people who profess to support individual liberty putting up with this situation. Us RestoftheWorlders have difficulty with the notion of any Western citizens putting up with the circumstances you describe. How many years must pass before you all get up on your hind legs and start demanding civilized treatment for ALL without regard to the ability to pay?
This is good for labor
Submitted by Brett (not verified) on Tue May. 26, 2009 9:19 PM PDT.
This is good for labor flexibility, although keep in mind that employers may not see this the same way. For example. the US Chamber of Commerce opposed the McCain plan back in 2008, but mainly because they were afraid it was going to undermine the employer-health care system and take away one of their main incentives for employment.
HIPAA
Submitted by Detroit Dan on Wed May. 27, 2009 3:53 AM PDT.
Health Insurance Portability and Accountability Act (Wikipedia has an entry)...
Self Employed
Submitted by Art Eclectic on Wed May. 27, 2009 6:56 AM PDT.
I'm self employed, closing in on 50 rapidly and I have health coverage that I pay for myself. Like Linkmeister, I watched the premiums for my old Blue Cross policy double over the course of about 7 years before I dropped them. I went to Kaiser, on a Health Savings plan. My premium is currently $185 a month for a policy with a $5000k deductible. I auto transfer $200 a month into my health savings account, to be spent how ever I decide. At the basic care level, I choose what my plan is and isn't going to cover and which doctors I'm going to see for care.
If something bad happens where I rack up a bill over $5000k, the Kaiser plan kicks in once the deductible is covered. $5k may seem like a lot, but the idea behind the high deductible is for it to be an amount that would not annihilate you financially, even though it would certainly hurt. My savings account has close to $3k in it, so if I have to cover that deductible, I'm halfway there already.
Since I went to an HSA, I've used it to pay for removal of my wisdom teeth, a root canal, chiropractor, a knee brace, blood work, doctor office visits, etc... And I didn't have to worry about finding someone "in network" ever.
I am self-employed and can
Submitted by Anonymous (not verified) on Wed May. 27, 2009 7:00 AM PDT.
I am self-employed and can tell you that the health insurance issue is a huge and scary burden. I have private insurance now after I realized that I needed to stop having any uncertainty around this -- that the fact that I sometimes have employer-based wouldn't cut it; it needs to be permanent. But man do I pay. Unless you have a substantial deductible, private insurance is prohibitive. But the deductible is brutal. Right now I'm looking at a bill for an MRI on my knee -- $1100. And anyone who thinks they will just go out and get private insurance if they need to has never looked at the application questionnaire. Basically, if you have had a headache in the last 5 years you are not going to be getting insurance. Anyone with any kind of pre-existing condition can forget it.
The issue isn't just entrepreneurial -- it's that you are one job loss away from serious trouble. When I had employer-based insurance, to COBRA it would have cost more than twice what my private insurance costs. I hate my private insurance, but now even when I could have employer coverage I decline it. No more ups and downs and vulnerabilities for me -- I'll pay out of pocket until reform comes.
Kevin, you're exactly right.
Submitted by Anonymous (not verified) on Wed May. 27, 2009 7:44 AM PDT.
Kevin, you're exactly right. I've had my own business for the past 17 years, but for about 50% of that time I've taken regular full-time employment so I can get the 18 months of COBRA. There are a number of (job-creating) things I would have done in my business if I did not have to take a job every 15-18 months to get affordable health insurance (pre-existing chronic conditions, 50+ years old etc.). HIPAA continuation, when available, was > 2x my COBRA payments. So I've stayed on as a Sole Proprietor, and bring on people on a contract basis only when needed. Hard to grow a business on a stop-start schedule.
COBRA isn't allowed for many
Submitted by David Schwartz (not verified) on Tue Jun. 23, 2009 10:13 AM PDT.
As far as COBRA insurance for citizens who lose their jobs, I'm one who was denied the oppourtunity to continue ny health insurance after being terminated from my job. Even though the company denies that my health (3 heart attacks in 4 years) was not a reason for my dismissal, they terminated me for failing to meet a sales goal that 30% of my fellow managers failed to meet. i was the only one terminated. Then they refused to allow me to continue my health insurances by not sending me the sign-up forms. Mine was the most blatant case of denial of COBRA benifits that I have found in 2 years of research, but, as many many americans have found out, those companies that ignore the law, can do so with no fear of legal actions. The federal agencies that are empowered and that are supposed to enforce the COBRA Act (department of laobr and the IRS) refuse to due to "lack of resources". I was classified as disabled shortly after my termination and have been receiving disabilty payments ever since, but, after 2 years of seeking legal help, i have been unsuccessful as lawyers WON'T take on this type of case because they fear that they won't receive high legal fees. But, I'm still trying.
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