From Wall St Journal: "Employers Pick Workers’ Pockets on Health Insurance"

Why aren't your wages going up? Maybe because you're the one paying for the health insurance your boss is supposedly paying for.

That's the gist of a new commentary in JAMA, which I'd missed till the Health Blog at the Wall Street Journal brought it to my attention: "Who Really Pays for Health Care?," the recent commentary by bioethicist Ezekiel Emanuel and economist Victor Fuchs,  argues that employer-provided health care is not as valuable a benefit as it is cracked up to be because employers basically pull it from pay raises employees would get otherwise. The result, the article says, is that you get flat or declining real wages, which is exactly what many workers have received the last decade or two. Thus along with management taking an increasing share of company income, rising health premiums are a main reason wages have been flat.

"Why does this myth matter?" ask the WSJ Health Blog --

Emanuel says that people’s belief that they’re getting a free benefit is a big reason why they are resistant to a major overhaul of the health care system. But employer-based health care is economically inefficient, Emanuel tells the Health Blog. A substantial chunk of the money goes to pay for things that have nothing to do with health care, such as underwriting, sales and marketing.

Uwe Reinhardt, a Princeton health economist, likens the employer-based health insurance to a garden party where a very slick pickpocket steals your wallet and then buys you roses and chocolates. “You’d be very grateful,” Reinhardt tells the Health Blog. Employers “are pickpockets who very skillfully take it out of your paycheck. Then they say, ‘Now genuflect.’ ”

The JAMA article is here, behind a paywall; the WSJ blog piece is here.

Tags: heath_insurance, health_care