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
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
Content prepared by Kara Stefan
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.
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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