Monday, October 15, 2007

 

We Insure, So You Don't Have To!

In the debates over health insurance, I've rarely heard anyone make the point – obvious, to anyone who works in the public sector – that one of the drivers of cost increases for us is the number of employees we have whose spouses use our health insurance to allow them to start their own businesses or to work part-time.

On my campus, the number of entrepreneurial spouses has reached the point that we actually offer payouts to people who are eligible for spousal coverage but don't take it. They get a fraction of what the cost to the college would have been, which is still several thousand dollars. In practice, that amounts to a windfall for the two-full-time-job couples, but it's largely inaccessible to other couples. The savings for the college are still enormous.

On a pragmatic level, the spousal strategy makes sense. One spouse works here, accepting an uninspiring public-sector salary in order to get the family health insurance. That frees up the other spouse to chase money, whether as a contractor or a consultant or an entrepreneur. As private health insurance has become more expensive, the incentive to dump the cost on the college has grown. While there's a case to be made that we're doing a public good by unleashing the entrepreneurial energy of all those spouses, I can't help but notice that we're insuring people who don't work for us (spouses) while not insuring people who do (adjuncts).

That's not even an employment-based system. It's something closer to an aristocracy, in which the status of your spouse trumps actual work.

What makes it even more galling is that the companies who offload their health insurance costs onto us are the same ones that complain about the resulting tax burdens. "Cause," I'd like you to meet "effect."

Over at Penelope Trunk's blog, her twentysomething guest poster wrote recently about skipping recommended medical tests while he's uninsured so he won't be diagnosed with anything that would count as a pre-existing condition when he finally gets insured again. The reasoning struck me as somewhere between brilliant and insane. More accurately, it's a reasonable response to a completely insane system. Which is what the spouse/entrepreneur move is, too.

I can't help but wonder if the folks who stick with jobs they hate just for the health insurance wouldn't be much more productive, eventually, doing other things. But they can't make that first move, because going without health coverage would open them up to catastrophe.

Thinking out loud here – what if you had health insurance simply by virtue of citizenship?

For the college, our costs would immediately drop, as we'd no longer be responsible for covering people who don't actually work here. Over time, some of the folks who just punch the clock here to keep their insurance would decamp for greener pastures, to the eventual betterment of all. The adjunct system would suddenly become somewhat less abusive, and also somewhat less necessary, since we wouldn't have to dodge paying for benefits anymore.

The twentysomethings who long to start their own businesses, but are afraid of going without coverage, could actually take their shots. Many would fail, of course, but I'd expect to see more innovation and economic growth over time. And they could get the tests they need before the currently undetected pre-existing conditions ripen into something much worse.

The companies that currently make their profits by offloading their health insurance costs onto more generous employers via spousal coverage would actually have to pony up, and the more enlightened employers would receive some sweet and badly needed relief.

In the media, the 'socialized medicine' debates are usually framed as free-marketeers versus dour statists. The frame is wrong. Moving health insurance to the background would make entrepreneurialism easier. It would encourage more economic risk-taking, since leaving Dreary Employer for Risky And Exciting New Venture would no longer involve going uninsured. As a country, we could divert our energies from playing 'hot potato' with the liability for sick people to actually creating value. National health insurance is pro-capitalist. It's also pro-college, since we wouldn't be paying for other people's employees anymore.

If you don't believe me, just wander around a college for a while, and ask every secretary or custodian you see what their spouses do. The entrepreneurial spirit is alive and well, when it doesn't involve not getting that lump looked at.



Comments:
I've always thought universal health care would be a boon to small businesses and the larger US economy, while eliminating an unfair advantage of large corporations. But then again, I'm a soft-hearted prof.

Completely separate point: I'm eternally grateful for my state health benefits. See, my partner was dumped from her full-time job probably because of her health status (suspicion reinforced by her oncologist). As a cancer survivor with multiple surgeries, no private provider will cover her. So, thanks to NJ's CU law and state partner benefits, she's covered, with better health benefits than what were provided at "corrupt, ethically-impaired corporation." For my employer (and the state of NJ), it binds me closer at a time when the school needs my level and type of experience (on-going national shortage). I was invited to apply for a job in Utah--not exactly a queer-friendly state, so, forgetaboutit. And, finally, I even have greater "warm fuzzies" towards my school and NJ. If my school and state are helping me take care of my family, I'm far less likely to move (me and my spouse) to another locale.

A few extra grand per year in health benefits is cheaper than 5 years worth of staff shortages and failed faculty searches. It's actually a win-win for the school and the state.
 
What about the "good old days" when both members of a couple didn't have to work outside the home? Although I agree with you completely about universal health care. The profit motive needs to be removed from health care.
 
"we actually offer payouts to people who are eligible for spousal coverage but don't take it."

Do you offer payouts to people who choose not to get married and thus burden the system?
 
We have the opposite problem at my college. We're small so anyone who has a spouse with decent coverage takes their insurance, leaving the folks like me (unmarried, so no choice in the insurance matter) stuck with terrible coverage and ridiculously high premiums.

My father took a 20K/year pay cut (at least) in the early 90s to take a job that offered health coverage for my mother (a stay-at-home wife, the kids were gone at that point). She had pre-existing conditions so no insurance company would touch her. (they had no problem giving Dad coverage since he was relatively young and healthy as a horse) The part that I love for the irony? Since that time, Dad has had MORE health issues than Mother. So that company would have gotten nailed anyway.
 
While I completely agree with DD's point (and have wondered the same myself), I should point out that Canada has universal health coverage---you basically only need the equivalent of a green card---and yet the stereotype of a Canadian is much less entrepreneurial than that of an American. Not sure why that is. Maybe stereotypes lag reality. Still, the number of Internet startups in Canada that have gone big is close to 0, as opposed to US Internet startups.
 
I don't have a spouse on my insurance, but I do have a rugrat. And guess what -- despite having only one child on my plan with me, I have to take the 'family' plan, which is much more costly than the couple/spouse plan, as it assumes multiple kids.

It makes no sense to me -- we're a two-person family, just like a couple, but I'm forced to pay a premium for kids that I don't actually have.

Don't get me wrong, I am more than grateful to have an insurance plan at all, having been without (and at other times on Medicaid) before.

But still...universal health care...we can dream, can't we?
 
While I agree with the overall point of universal health care making the system much more fair to all, the spousal payout rubs me wrong. What about recruitment and retention?

For instance, the first TT job LDH took offered me (the spouse) no subsidy on the premium. The expectation was that I would find a job and get my own health insurance. Putting aside the issue of why we should or should not force both spouses to work full time all the time, I couldn't find a job in this particular town. At least not one that used my (very practical) masters degree. So, I took a job as a secretary at a bank - for the health insurance.

DRD
 
And those pesky kids.. If the college didn't insure our children, then maybe Bush wouldn't veto CHIP programs. Or maybe fewer of those burdomesome employees with familes would choose to work for the college.
 
If it is not obvious, we didn't stick around very long at the school. I wasn't happy, thus their hire wasn't happy. We left after a year.

DRD
 
Eurgh, health insurance.

My friends are at that age where the jobs that fit their lives and skills (mostly retail) don't provide health insurance at all, or do so under the stupidest conditions possible (work there for a year at full time, when you can't be considered "full time," no matter what your hours are, for a year before that, and oh, by the way, you have to maintain these hours and not be transferred between stores or take a different position within the company).

Since we're still in school/just got out of school/trying to get back into school, it's an absolute crap shoot, and none of us can afford COBRA stuff anyway. So one of them is doing the 'registered domestic partnership' thing with her boyfriend, so she can be insured through his company... and my boyfriend and I are considering doing the same thing so he can be insured through mine. It's absolutely infuriating.

I'm definitely one of the ones who's stuck in a shitty job because of the health insurance (and, okay, the money) ... if I had breathing room on that front, I'd be much better off. And yes, I'm also dodging tests and treatment because a) I don't want it to get back to my employers, and b) I don't want to be denied coverage when I have to go somewhere else.

I can't imagine any scenario in which it's more advantageous over even a relatively short timespan to have a bunch of sick, stifled, unhappy people stuck working for you than it is to have healthy, happy, productive people doing the same things.

If I liked this place, I'd be awesome. I've done the same work at places where I've fit better and not felt screwed all the time, and gotten a bloody lot of compliments and done some fairly impressive things. Getting into the office here feels rather like being concussed; it's all I can do to pretend to do my job, let alone do anything really useful. How is a system that makes it harder for me to leave in anyone's best interests?
 
I would prefer that health insurance be not related to work at all.

However, if it is, then a cafeteria style plan makes the most sense. Two assistant professors could be hired at total compensation x. Each could choose which insurance plans, which benefits and for how many dependents. Each additional choices costs more money.

This way, a professor who is single and a professor who is married and has 10 kids receive the same total compensation.
 
1) At my last gig, there was someone I knew who was notoriously a chair-warmer and everyone assumed this person was there because of health insurance. Astonishingly, the partner owned a business that made enough money to keep the employee in very nice cars.

2) I got married so my husband could get on my insurance. We are happy (7+ years now!) but still. It just strikes me as the most absurd horrible thing.
 
I hate employer-based health insurance as well. My last job offered ridiculous benefits (and now that I'm paying COBRA, I can see exactly how much they're worth), and covered spouses and children at no extra charge. Unless the spouse worked at a job that offered insurance, in which case they charged you money, unless you accepted (and paid for) that insurance as well. I always thought this was an underhanded way to push the other spouse into a support-staff role, thus freeing up their employee for longer hours. Since I lost that job, I've idly considered marrying my boyfriend, who still works there, just for the health insurance.

That said, you do seem to be ignoring the elephant in the living room...your college chooses to cover spouses and children at no additional charge. If you provided insurance for only the employee, and charged the actual cost for any dependents, you wouldn't have this problem. If you're unable to get quality employees without offering those benefits, then they're part of the cost of retention, and you might as well suggest the government pay everyone $5000/year so you don't have to.
 
Re: palm's point on Canadian insurance - I don't know that one can claim that Canadian's are less entrepreneurial on the basis of not having large internet startups. Out of my friend's from college I can't think of one person that owns their own business, out of my husband's friends (who all live in Toronto) his sister owns her own business, best friend owns two businesses, several other friends work for best friend, and others have been able to make some interesting choices such as pursuing a music or acting career that would have been difficult if there was an insurance question. Those aren't "big" startups - but they contribute to economy and our friends are probably a lot more productive working for themselves then they would have been otherwise.
 
former cc employee: I did the same thing--marriage so the husband could have health insurance. Not the only reason, but a consideration. And every time I say that in front of a gay/lesbian couple, I cringe knowing what a ridiculous and non-sensical privilege it is to take it for granted that my legal partner will be eligible for health insurance. WHY ON EARTH is health insurance tied to marital status??? (Obviously there are exceptions, such as calugg notes above)

I think the larger question is why we as a nation, do we put up with this crap? DD is taking an economic approach, which is fine. I just want to ask point blank--why is that one of the wealthiest nations in the world systematically ensures that only certain people get adequate access to health care? Why does it have to be an economic argument? Our current system is horrendous and only makes sense for HMOs and PPOs...not for the people who seek health care or the people who provide it.
 
Two quick points:

1. Just keep in mind that the system we have, especially the fact that health insurance is tied to employment, is NOT a "free market" outcome. That linkage came about during World War II when wage and price controls made it impossible to attract new workers with higher wages, so firms began to offer health insurance instead, then the federal government decided to treat non-wage compensation as non-taxable, distorting the incentives even more. It's highly unlikely that a free market health care system would look anything like what we have - whether it would be better or worse is another question. There have been numerous free market reforms proposed that would also attempt to end the employment-health insurance link.

2. NO health care system can promise that everyone will have equal access to all the care they want or need. Just look at the story on CNN today about British citizens using "DIY dentistry" because the NHS can't find enough dentists to serve them. Or the story earlier this month about Canadian hospitals sending pregnant women south of the border because they didn't have enough beds or the right equipment.

Health care is a scarce good and must be "rationed" in some form. If you do it by the market, wealth will matter and some will get better care than others (but all might get better care than today - it's possible anyway). If you do it through government, those who have access to power will be favored, as will those willing to wait in line, as will those with wealth who can procure the services outside the public system. In any case, not everyone will get everything they want and the wastes associated with government provision might well be larger than the costs of doing it via the market.

My point is simply that calling for "health insurance as a right" is not the same thing as ensuring that everyone gets the care they want/need, nor that the system wouldn't have inequities of its own. Intentions are not the same as results.
 
It is relevant that Britain spends about a third and Canada about a half of what we spend, per capita, on health care -- to get better service on average, albeit not in a nontrivial number of specific instances.

To put it another way, we shouldn't compare ourselves to Britain or Canada -- we should compare ourselves to Britain or Canada if their systems as currently constituted had 2-3 times as large a budget as they currently do.
 
Plam, Canada has a higher proportion of workers either self-employed or employed by small businesses than the US (or did a couple of years ago, when I last checked), just as teh US has a higher proportion of corporations with government ownership (in the sense of our Crown Corporations). This is one case where the stereotypes are a tad out-of-date.

Kimmit has it right for budgets, something I wish our reporters would mention every time our right-wing government talks about the benefits of privatizing health care. When we spent closer to what the US spends, no one worried about wait times.

Dean Dad, what about single people? They are costing you the same as those who have spouses but opt out of the health plan. Do they get savings too?
 
My state seems to handle this by having pretty unattractive spousal coverage rates. Kids are covered cheaply - spouses, not so much. My wife and I both teach and it is significantly less expensive for us to have separate individual coverage than for us to be covered under the same policy.
 
"And guess what -- despite having only one child on my plan with me, I have to take the 'family' plan"

Argh, my husband's employer (I'm an adjunct, no coverage for me!) offers either "single employee" or "family plan" at 4-6 times the cost. So the two of us are a "family plan." Despite being, you know, two of us. The guy two offices down with a wife and 4 and a half kids pays the same we do.

(On the one hand, I don't want to penalize people for having children, but 4-6 times as much? Seriously?)
 
Some people mentioned the usual suspects who argue for a "free market" health insurance system, but have you ever seen one of them tell you what health insurance they have?

Odds are that their think tank has a corporate plan, and that they have never applied for individual health insurance coverage with its exclusions and possible genetic and other tests as a precondition for approval of the policy.
 
Hey stop the stereotyping. I'm a toujour gai statist type and enjoying every minute of it
 
Your post implies that if only the spouses worked full-time jobs where they weren't their own boss they could get health insurance through their own jobs. Often this isn't actually the case. Also, given that professors often have to move across the country for jobs, the least a "trailing spouse" (of any gender) should get out of their own now diminished career is some health insurance.
 
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