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.