Employer-provided health insurance in the USA began in WWII when wages were frozen due to the war. Health insurance was one fringe benefit employers could offer to compete for workers without raising wages.
After the wage freeze was lifted, employers not providing health insurance benefits did not raised the pay of employees without employer-provided health insurance so that their employees could buy their own individual policies. Employers not providing health insurance still don't include the cost of employees' individual health insurance policies in their assumptions about how much employees need for their costs of living.
For much of the 20th century, the health insurance model was based on a male breadwinner supporting his wife and minor children, none of whom worked, but were insured by an employer-provided policy. Workers' pay is also based on this presumed family structure. Equal-pay laws covering women have not remedied the pay inequities.
Employers who don't pay a true living wage, or provide health insurance and other benefits, are externalizing their employees' cost of living shortfall, and externalizing their employees' cost of health insurance and healthcare. Because of the significant proportion of employees who are not in that aforementioned insured male-breadwinner family, much of these costs are now externalized to government aid programs.
The fact that wages have increasingly not kept pace with the rising cost of housing since the early 1970s is a big part of the problem for lower-paid employees who have trouble paying for health insurance and healthcare. I think a lot of the rise in housing prices is caused by owners and sellers "charging what the traffic will bear" instead of using a cost-plus method of pricing. A fuller discussion of housing costs is part of a different subject, but should be mentioned here, because for most Americans it's the biggest cost of living.
Typical private health insurance policies have had inverse relationships between the premium and the deductible & co-pays. A person who wants a lower deductible and lower co-pays has to pay a higher premium. This is to reduce the insurance company's exposure to costs. For Americans with insufficient incomes, this kind of choice among policies makes adequate health insurance unaffordable.
For Americans with incomes too low to buy adequate private health insurance and pay out-of-pocket healthcare costs, and not covered by someone else's insurance policy, government must be the party to make up the shortfall. If a person's income is below a certain level, he should get 100% coverage. If his income is above a certain level, his health insurance and health care costs can left to any employer, and to the person himself.
Between these income levels, there must be a sliding scale of government coverage for these Americans, regardless of how a new system is structured. For every unit rise in a person's income the reduction of government aid could be less than one unit of increased income. This system also would take into account the fact that some expenses whose cost responsibility will switch from government aid to the person's own wallet, are priced in amounts greater than "one unit."
For example, suppose an individual health insurance policy for a person costs $500/month. If all government health insurance and health care aid to this person is cut off when income goes up by $50 above the cutoff, he's $450 worse off than before. He should still get some help paying for this policy. He should get enough help so that he can keep some of his increased income. For example, if the government help in paying the premium is reduced to $490, he has to pay $10 out of his $50 raise, and gets to keep $40 of it. People with increased incomes have to have an incentive to keep earning these incomes. It's good for them, good for the economy, and good for government coffers providing help to people with health insurance & health care costs.
The term "poverty cliff" is used for government aid systems which do not use a a correct sliding scale, or take into account the actual costs of privately-purchased goods and services, when reducing and eliminating aid to people whose incomes rise to the cut-off level.Charts have been made of this.
Another thing that must be taken into account for government aid to health insurance and health care costs is the fact that while the cost of the health insurance premium stays fixed for the duration of the policy as described by the insurer, and is something a person can easily put into his monthly budget, any deductibles and co-pays are often not regular and can come with medical events which are surprises.
A 30% co-pay for an expensive, unexpected treatment could exceed the ability to pay of a person with low income. It might not exceed the annual deductible, but it could blow his monthly budget. This needs to be remedied. How? Either let the insured spread out the payments with no penalty (e.g. high interest charges), or include co-pays and deductibles in government aid, somehow.
Government aid can't be just for insurance premiums. It has to cover all the person's out-of-pocket costs, until that person's income is high enough to disqualify for the aforementioned sliding scale.
(Article changed on March 12, 2017 at 02:22)
(Article changed on March 12, 2017 at 03:14)