I believe, have not gone as far as it can possibly (and, in my
opinion, necessarily) could go (even though it is already facing tough
resistance from many). Rather than just providing a government
alternative to insurance package offered by private companies,
shouldn't there be something else other than just the supply side that
need to be looked at?
To be specific: what about how the best insurance option is chosen and
purchased? Considering that a large number of people in the US get
there insurance from their employers (i.e. they don't choose the
insurance, their bosses do), maybe it would be wise to change that
structure much more so that the employees receive the greatest
benefits while bypassing the step where the bosses weighs the economic
costs to their companies.
Of course, the merit of companies providing their employees heath
insurances has the benefit of attracting more capable workers.
However, covering the insurance costs brings up the costs of operating
the company, thus necessitates the companies to find more ways to cut
other costs while increasing the revenue.
If law can dictate that healthcare provision be left entirely to the
government and the individual employees (like what they do up in
Scandinavia), the corporate costs incurred by healthcare provision can
be reduced, simultaneously reducing unnecessary inefficiencies to the
economy that ultimately hurts the both the employees and the
consumers.
Companies providing healthcare for the employees are disadvantageous
to the employees themselves in the long run. To cover the costs of
the insurance, the companies must cut other benefits of the employees
to keep the overall costs of production constant. The companies must
take into account the costs of the insurance when compensating for the
works of the employees, thereby cutting their salaries by the
insurance cost.
At the same time, the companies can decrease the vacation of the
employees to increase production, using the extra revenue to cover the
insurance costs. While such a trade-off between healthcare and salary
or healthcare and vacation seems harmless, for the many manufacturing
firms and their blue-collar workers, the occurrence of a deadly
accident might as well be a time for lay off for the remaining
employees as their insurance costs skyrocket afterwards.
Also, when choosing the insurance, the companies will simply choose
one for all the employees that will have the most overall benefits
with the least overall costs. Such arrangement is inefficient in that
the individual employees cannot select the ones most suitable for
them. The employees do not benefit from company provision of
healthcare due to accident and individuality issues.
Furthermore, the company-provided healthcare can damage consumer
benefits by raising the price of goods and services. As the companies
need to earn more revenue to cover the costs of the employee
insurance, the most convenient method is to increase the price of
products. Considering that if all companies are required to provide
employees with insurance, it is very possible that the insurance
provision will be followed by rapid inflation.
Simultaneously, if the companies are to cut employee salaries to make
up for insurance cost, the decrease in consumption and thus demand for
products coupled with the inflation can easily send the economy into
recession. In time of recession, the companies are still forced to
provide insurance for the workers, necessitating their employee lay
off and salary decrease to cover the loss of revenue.
Such moves by the companies will only send the economy deeper into
depression through a vicious cycle. Company provision of healthcare
can only generate inflation and make the economy more vulnerable to
economic downturns.
All in all, healthcare provision by companies is much less
economically efficient than provision by government or individual.
With government provision, the people can spend more of their income
on consumer goods rather than insurance, boosting the economy while
not hurting the incomes of the insurance companies.
With individual provision, the people can choose the insurance
policies most suitable for them, preventing some insurance companies
from gaining unfair advantage on the market by having the patronage of
large corporations. Comparatively, provision of healthcare by
companies can only lead to employees' dissatisfaction with their job
benefits and gives the economy less flexibility in the long run.
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