How The Ties Between Your Employer and Your Health Insurance Are Unraveling – and why that’s a good idea.

Posted on | September 25, 2013 | 2 Comments

Mike Magee

A series of highly publicized reports over the past few weeks have raised concerns that employer’s paternalistic involvement with your health and your health insurance is on a downslope. But is that really bad?

Home Depot announced plans to shift 20,000 part-time (less than 30 hours a week) employees to government sponsored insurance exchanges. IBM and Time Warner are moving thousands of their retirees to the exchanges. And Walgreen’s and Sears are moving thousands of current workers to the state and federal exchanges with support of an employer defined contribution which will supplant the former defined benefit.(1,2)

The bottom line is that employers are following the same path they did with the shift from pension benefits to fixed contribution driven 401(k) plans. But was having employers involved in your health ever really a good idea?

Let’s remember that we’re the only advanced nation in the world that took this path. Let’s also recall that it’s origins were not altruistic. It began as a defensive move by auto manufactures in response to the Toledo auto workers union collective announcing in the late 40’s their intention to begin a health insurance plan for their members. The employers saw that as potentially strengthening the unions, and the rest is history.(3)

What are the current health insured numbers as of 2012? In broad terms, about 55% of our citizens receive health insurance from their employers. Some 10% purchase their own insurance on the private market. About 1/3 of Americans receive some form of government health insurance – roughly have in Medicaid and half in Medicare, with a small percentage through the military added on. And 15.4% are uninsured, down from 15.7% in 2011, and soon to drop further.(4)

Most expect that employers will continue to distance themselves from fixed health insurance benefits based on financial objectives. While this may be the right decision for their shareholders, it is also the best decision for health consumers. Here are 5 reasons why.

1. Employer involvement in your personal health raises fundamental privacy issues.

2. Employee based health prevention programs have a modest track record, redistribute resources to outsourced vendors, and do very little to reinforce existing relationships between employees (and their families) and their personal health care professional support network.

3. Employer involvement in employee health plans, though well intentioned, creates fundamental internal conflicts. For example, leadership oversees employee health status issues while at the same time managing succession planning.

4. Americans, in large numbers, do not wish to share their health data with employers. This bias extends to young Americans as well. Our 2012 Health Visions survey of college students, medical students and nursing students, found that only 20%, 10% and 9% respectively would be willing to share their complete medical record with employers (compared to 88%, 98% and 99% sharing with doctor, nurse and health care team).(5)

5. In the area of health prevention, corporate entities are a weak source of health professional messaging compared to health professionals. As important, health consumers by far, are most likely to trust and to act on health professional information that comes directly from their own doctors, nurses and hospitals. Our 2002 Harris Interactive survey of 2506 health consumers found that 67% saw their doctor as a source of health information, 82% trusted that source a great deal or very much, and 98% were very likely or somewhat likely to follow recommendations based on that information source.(6)

The bottom line is, let business do what business does well – provide jobs that are stable, secure, useful, with opportunity for growth and advancement. And leave health care to the professionals. If the American experiment has proven anything, it is that the two don’t mix very well.

For Health Commentary, I’m Mike Magee

References:

1. Beckerman J. Home Depot Alters Insurance For Part Timers. WSJ. September 19, 2013. http://online.wsj.com/article/SB10001424127887323308504579085482697231734.html

2. Burritt C. Home Depot Sending 20,000 Part Timers To Health Exchanges. Bloomberg News. September 19, 2013. http://www.bloomberg.com/news/2013-09-19/home-depot-sending-20-000-part-timers-to-health-exchanges.html

3. Magee M. Employer Based Health Insurance – How It Began, Why It Is Bad For The Economy, and Why Employers Want Out. November 15, 2012. https://www.healthcommentary.org/?p=5379

4. US Government Census. 2012. Health Insurance Rates. http://www.census.gov/prod/2013pubs/p60-245.pdf

5. Health Visions Survey. 2012. Positive Medicine Inc.http://bit.ly/19zhsOK

6. Magee M. Home-Centered Health Care. 2007. Spencer Books. NY, NY. http://spencerbooks.com/books/homecenter.html

Comments

2 Responses to “How The Ties Between Your Employer and Your Health Insurance Are Unraveling – and why that’s a good idea.”

patricia colella
September 25th, 2013 @ 12:37 pm

i guess it;s all about money those that have get it and those who don’t have it don’t
Mike Magee
September 25th, 2013 @ 1:52 pm

Left on its own, that’s been my experience. And in the middle, we have everything from 401(k) managers to employee benefit consultants to lobbyists quietly sucking resources out of the employer run systems that might better be applied to the service of those in need.