Tag Archives: competitiveness

Connecting More Dots

I’ve often argued that universal healthcare–Medicare for All–would spark an outpouring of entrepreneurship. If you want to open a shop, or go into the widget-making business, one significant barrier to doing so is the need to offer (very expensive) health insurance to your employees. Of course, you could decide not to provide that benefit, but you wouldn’t be very competitive in the market for good workers.

I understand, dimly, the historical reasons why the U.S. linked employment to health care, but it has always seemed to be a bad idea. What about people who don’t/can’t work? What about independent contractors? Why should an employer have to assume the costs–and risks–of employees’ health? Other countries do not couple jobs and insurance in this way–health insurance is provided as part of the social safety net, and the costs are spread much more widely.

Yesterday, in a Facebook post, a friend of mine explained why medical insurance provided through government–decoupled from employment–would boost the economy and make American businesses more competitive.

As he noted in his post, when you buy a product, all the costs of creating that product are reflected in the price: production, workers’ wages and benefits, materials. Most of the nations with whom we trade big-ticket items have had government-sponsored health care for decades, and at far lower cost. As a result, Saab and Mercedes, among others, are able to compete unfairly with American-made autos whose prices include a hefty private-sector health care premium. (I’ve seen numbers suggesting that this was one of the reasons GM and Chrysler went bankrupt; healthcare coverage for current and retired employees added over 2000 to the average price of their cars.)

If we really cared about keeping U.S. businesses competitive–and the health insurance system comprehensible–we’d have Medicare for All, or at least for anyone who wanted it.  Given our political environment, and the lobbying clout of Big Insurance and Big Pharma, that was never in the cards.

Obamacare was (barely) politically feasible because it was originally the Republican alternative. With all its warts, it’s a step in the right direction, but if we want America to remain competitive,  we will eventually need to separate access to health insurance from the vagaries of employment.