Employer Provided Healthcare Insurance

More often than not, I find myself agreeing with ABC News reporter and columnist John Stossel. He’s a libertarian and I hold mainly libertarian views. But I think he was way off base about a point he made in a column he wrote about health insurance.

Now, I agree with much of what he says about the waste and abuse that is encouraged by the nature of health insurance in general. Many of the lesser expensive items it covers, like doctor visits, vaccinations, diagnostic screenings, and some generic drugs, would make more sense to be paid for out of a health savings account. Coverage of these items drives insurance prices up and hides the real costs of health care.

I also agree with him that the government shouldn’t force employers to provide health insurance for their employees. Additionally, I agree with his general view that government should not be tampering with health insurance at all. It should be completely left to the free market, just like other goods and services.

However, with all of that being said, I strongly disagree with his assertion in the same article that having the cash to purchase health insurance on one’s own (individual insurance) is much more preferable to having an employer spend it on one’s behalf for group health insurance, which he suggests is a “bad idea.” Granted, for those like Mr. Stossel, who have had a life free of health problems, this might be true. But for most of the rest of us, nothing could be further from the truth.

Though I resent the fact that this is largely due to government meddling, the way things stand now, we cannot generally get economical protection from the costs of expensive prescriptions and hospitalizations outside of group health insurance. That’s just a sad fact of life, whether Mr. Stossel chooses to acknowledge it or not. Frankly, if offered an extra $500 a month in lieu of group insurance coverage by my employer, I would decline it in favor of the status quo.

For the average person who can qualify for it (generally a fulltime employee who is fortunate enough to work for a company that offers it), group health insurance is hands-down the best. To those who maintain their eligibility status, it offers five major advantages over individual health insurance policies:

1) They cannot be excluded or forced to buy a “special” policy because of pre-existing conditions or a history of poor health.

2) They generally pay cheaper premiums – even when their employer contributes little or nothing toward the cost.

3) They can’t be singled out for cancellations of their policies, due to health problems.

4) They can’t be singled out for rate increases.

5) They often get much higher annual and lifetime maximums than they would get with corresponding individual policies. This offers them greater protection in case of catastrophic illnesses or injuries.

Now, those who would still argue that individual health policies are better for the average person, even under present conditions, need to answer the following questions:

Why is it that it is extremely rare for someone to decline group health coverage that they are eligible for in favor of purchasing an individual policy on their own?

I know many people who have postponed their early retirement plans, not because they need the money, but so that they can maintain their eligibility for group health insurance. If individual health insurance policies were so much better, why would this ever be the case?

Why is it fairly common for people to turn down contractor positions offering higher pay with no health insurance coverage in favor of lower paying jobs that do include group health insurance coverage? If you are right, then why would this ever happen at all?