Employer-Based Health Coverage Is Failing, but Options Are Limited

Armen Hareyan's picture
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Employer based health insurance

The employer-based health coverage system that was stable for decades is cracking, and the solutions for remedying it all have problems, writes Wall Street Journal columnist David Wessel. Nearly all companies are shifting health costs to employees, and many are opting out of offering any coverage. He notes that the percentage of Americans covered by employer-provided insurance has slipped to 60 percent since 2000, while the percentage that are uninsured has increased to 15.7 percent. "If employers pull out of the health and pension business, who takes their place?" Wessel writes.

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He says that there are three options that "all have problems." Making it cheaper for employers to offer benefits, with such strategies as the high-deductible health insurance coverage promoted by the Bush administration, or forcing them to offer it with so-called "Wal-Mart laws," is resisted by businesses.

Making it easier for workers to "fend for themselves" as health care consumers with health savings accounts or Massachusetts-like health mandates forces individuals to make decisions they might not be capable of and limits the benefits of pooled risk. Finally, having the government "pick up more of the tab" with government subsidies is not promising because the government does not have "any visible means of paying."

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