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Employers Who Don't Offer Medical Insurance - What's Universal Health Care Going to Cost?

I haven't read the 10,000 page opus from the incoming administration, but I'm interested in what the Obama health care plan is going to look like.  On a broad level, what we think we know is that the next administration’s health care designs reflect what has been put in place in Massachusetts since then-Gov. Mitt Romney signed a universal health care law in 2006. Both plans leave the employer-based health care system alone, while providing individuals access to cheaper insurance rates in the group market and penalizing employers that do not offer health insurance.

So, we've got something to work with.

More on the Massachusetts plan from Workforce:

"There is, however, one key exception: Unlike Massachusetts, Obama has not supported a lawUniversal  requiring individuals to purchase insurance—a politically fraught policy that is nonetheless seen as crucial to the success of Massachusetts’ effort.

By ditching the mandate for individuals to purchase insurance, Obama may have removed a political stumbling block. But in its absence he would have to contend with the consequences.

Also confounding expectations, few employers have opted to pay the penalty of $295 per employee, choosing instead to invest in the more expensive option of providing health insurance for employees."

Here's what I'm absolutely shocked about after doing a web search on the Massachusetts plan - the $295 number?  It's per year, not per month.  Hit this link from BCBS to see the rundown.  The math is crazy, since typically a $295 number would represent a ballpark cost PER MONTH for a decent BCBS medical plan, and the annualized amount of roughly $3,600 is really where the bidding begins for the average annual cost to cover an individual.  Wow.

San Francisco, on the other hand, seems to have a better grasp on what health care actually costs, and is planning on charging employers, who don't offer health insurance, more of a market rate for their choice not to offer health care benefits.  More on the SF health insurance mandate from Workforce:

"In Golden Gate Restaurant Assn. v. City and County of San Francisco, the restaurant owners group had successfully challenged the 2006 San Francisco ordinance, arguing that its spending requirements were pre-empted by ERISA, which precludes state and local governments from enacting laws dictating the contents of employee benefit plans. Although the U.S. District Court on December 26, 2007, ruled in favor of the restaurant group, its decision had been stayed pending the outcome of the appeal.

The case has received national attention, and the U.S. Department of Labor filed an amicus brief warning that upholding the San Francisco law would "open plan sponsors to a potentially bewildering and conflicting array of mandates."

Under the San Francisco law, employers with 100 or more employees have to make health care expenditures of at least $1.76 per hour for every eligible employee working in the city for at 10 or more hours per week. For-profit employers with 20 to 99 employees and nonprofit employers with 50 or more employees have to spend $1.17 per hour for eligible workers.

Employers that fail to comply with the ordinance are subject to fines equal to 150 percent of the amount they are mandated to spend on employee health care."

I'm not advocating any approach with this post, just pointing out that if you want to offer universal health care, which is a good and noble goal, someone's got to pay - employers or the taxpayer.  Not paying for it, with a realistic cost structure up front, just means more deficit spending that will make the cost of the war in Iraq look like a three day trip to Disney.

I'm just saying...

Comments

Insurance

This was a very interesting article. thanks for the post and for your insight.

Tanya

Who's got Disney on the brain? Huh? Health care is the dead skunk stinking up the room and it amuses me a bit to see how - as a nation - we try to ignore it. Employers currently shoulder 34% of the cost of health care in the US which is over 2.2 trillion dollars and mostly pays for preventable chronic illnesses. That is just not going to change. If people gave a big F.U. to the big 3's measly $25 billion then you bet your bippy no taxpayer is going to raise their hand to pick up where employers and health carriers left off. I just can't imagine that will work. The funny thing about all of this is that so much is at stake (like, ooooooohhhh 20% of our total GDP in the US) and less than 4% of media coverage actually focuses on health care. I think we are going to crash and burn on this issue in the next two years.

Some links:
http://kff.org/entmedia/7839.cfm
http://corporatewellnessprogram.recesswellness.com/2008/10/700-billion-pffffttt-bailout-is-for.html
http://corporatewellnessprogram.recesswellness.com/2008/11/can-we-make-america-healthiest-nation.html

stephen

nice post and very true.

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