The Upside to Universal Health Care: Benefits Nobody Talks About
There’s a growing number of businesses that have kept quiet when it comes to the health care debate. While they may be all about the free market, the reality is that the exponentially rising costs of providing health care to their employees is increasing overhead, reducing profits and making them less competitive with foreign markets.1
Many believe a universal health care plan — a government-sponsored program in which medical care is provided to everyone regardless of their ability to pay — could help solve these problems. In short, companies could stop paying for health insurance. Presumably, that means they could pay their employees more, although much of the increase may be absorbed by higher taxes to fund the program. However, the competitive benefit for employers — both large and small — would remain.2
There also is a considerable benefit to those who would like to retire early, pursue a consulting career or hobby income as a phase-in to retirement. Often, employees can’t accomplish this for one reason: They’re working for health insurance coverage. If you’d like to explore ways to help bridge the gap of funding health insurance and income before you’re eligible for Social Security and Medicare, you can contact us to schedule a no-obligation meeting.
Universal health care also could offer an advantage to small businesses and entrepreneurial-minded people. Small businesses would no longer lose out to larger companies when it comes to hiring talent, as health care would no longer be a competitive benefit. Employees who would rather work at a smaller company would now have that option without losing out on a robust health insurance plan.3
Employees would also be released from the phenomenon known as “job lock,” when many people stay at their jobs solely for health insurance benefits. This has a lot of downsides, from poor morale and lower productivity to curbing labor mobility and entrepreneurship.4 In terms of economic growth, small businesses account for two-thirds of net new jobs and represent close to half (44 percent) of U.S. economic activity. If workers aren’t saddled by the need for employer-sponsored health insurance, they would have the option to quit and start their own businesses.5
This issue was recently spotlighted by a report that over the past 10 years, the employee share of health insurance premiums has increased 71 percent, while average earnings increased only 26 percent. Even workers with robust employer-sponsored insurance are increasingly paying more out of pocket. On average, employees pay $1,242 (singles) or $6,015 (families) a year for insurance premiums, and deductibles have doubled from $826 to $1,655 on average.6
There are many other potentially significant advantages to broad-scale universal health care. First, it could reduce the overall cost of health care because the government would be able to leverage volume to negotiate better pricing structures for medical services and prescription drugs. Administrative costs — particularly for hospitals and doctor’s offices — would decrease because they could file claims with a single entity instead of multiple insurance companies. That would reduce provider overhead expenses, allowing these entities to invest in more medical personnel.7
Since everyone could receive health care, there could be fewer emergency room visits for minor ailments. Plus, there could be a greater emphasis on preventive care, which is particularly important for children’s health but also critical to diagnose illnesses before they progress and become more difficult or expensive to treat. Together, these advantages could help reduce the growing costs of delivering health care in this country.8
Finally, universal health care would eliminate the need to administer Medicaid and Medicare programs, allowing those resources to support the larger plan. Moreover, some of Medicaid’s program benefits — such as coverage for community-based long-term care services — could be incorporated into the universal plan, which would be helpful for our aging population.9
If you would like to discuss your financial future, please give us a call at 480.339.7103. We’re always happy to speak with you and answer any questions.
Content prepared by Kara Stefan Communications.
1 Phil Galewitz. Kaiser Health News. June 7, 2019. “Why Some CEOs Figure ‘Medicare For All’ Is Good For Business.” https://khn.org/news/a-large-employer-frames-the-medicare-for-all-debate/. Accessed Sept. 30, 2019.
3 Gene Marks. The Hill. March 25, 2019. “Universal health care would benefit my small business.” https://thehill.com/opinion/healthcare/434981-universal-health-care-would-benefit-my-small-business. Accessed Sept. 30, 2019.
4 Allan Golombek. Real Clear Markets. June 17, 2019. “Government-Funded Health Insurance Is Essential for the Free Market’s Survival.” https://www.realclearmarkets.com/articles/2019/06/17/government-funded_health_insurance_is_essential_for_the_free_markets_survival_103783.html. Accessed Sept. 30, 2019.
5 Small Business Administration. Jan. 30, 2019. “Small Businesses Generate 44 Percent Of U.S. Economic Activity.” https://advocacy.sba.gov/2019/01/30/small-businesses-generate-44-percent-of-u-s-economic-activity/. Accessed Sept. 30, 2019.
6 Alicia Adamczyk. CNBC. Sept. 26 2019. “Health insurance premiums increased more than wages this year.” https://www.cnbc.com/2019/09/26/health-insurance-premiums-increased-more-than-wages-this-year.html. Accessed Sept. 30, 2019.
7 Natalie Regoli. Vittana.org. “17 Universal Health Care Pros and Cons.” https://vittana.org/17-universal-health-care-pros-and-cons. Accessed Sept. 30, 2019.
9 Jennifer Tolbert, Robin Rudowitz and MaryBeth Musumeci. Kaufman Family Foundation. Sept. 12, 2019. “How Will Medicare-for-all Proposals Affect Medicaid?” https://www.kff.org/medicaid/issue-brief/how-will-medicare-for-all-proposals-affect-medicaid/. Accessed Sept. 30, 2019.
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