Friday, December 16, 2011
It has been widely reported in the mainstream news media that 2.5 million young adults who were uninsured are now insured because of the Patient Protection and Affordable Care Act (PPACA)’s requirement that children be allowed to stay on the parents’ health insurance until they are 26. As reported in USA Today, the Department of Health and Human Service (HHS) states the rise in coverage is attributable to the PPACA, because there was no such rise in the age group of 26-35-year olds, and no increase in Medicaid coverage for adults in the 19-25-year-old age group. HHS also noted that the timing of this increase (much of it in the spring) indicates that many young people took advantage of the law’s provisions as they graduated from school.
While the increase in coverage for this age group is good news, the fact that there was no increase in insurance coverage in the slightly older 26-35 year old group, and the timing of the increase for the 19-25 year old group, highlights the continued stagnation in the job market as much as it highlights a “success” of PPACA. The fact that a great many 19-25 year olds needed to get onto their parents’ health insurance upon graduating from high school or college is not a sign of a robust private insurance market, it illustrates that young adults either have no jobs, or they have jobs that do not come with health insurance benefits. As the parent of a college freshman and a high-school senior, I can tell you that the prospect of my kids being able to remain on my insurance plan until they are 26, so I can pay for their premiums (as well as likely welcoming them and their piles of dirty laundry home after they finish college and can’t find full-time jobs) does not exactly fill me with joy, although it does allow me to breathe a sigh of relief when they go rock-climbing or bungee-jumping or whatever high-risk activity they engage in.
If any good thing can come out of this tough job market, it may be a realization that continuing to tie health insurance to employment has outlasted its usefulness. As I wrote in my 2008 article, The Health Washington Initiative: Blue Ribbon Process, Red-Herring Result the employment-based health insurance system is a vestige of World-War II-era wage controls and has continued because of favorable tax treatment given to amounts spent by employers and employees for employer-based health insurance. In the 1940’s, and for many years afterwards, the prevailing model of a successful career was full-time employment with the same company for 35 years, with a gold watch and a pension upon retirement. Now, for those under 35, self-employment, temporary employment, and part-time employment often prevail over traditional full-time employment, sometimes by choice and sometimes by necessity. We applaud these efforts at creative productivity, to strike work/life balance, and to be entrepreneurial, but the employment-based health-insurance system works against the efforts of young people to forge their own productive paths.
An alternative to employment-based health insurance system does not have to be a single-payor system. Changes to tax policy that provided tax benefits for purchasing health insurance on individuals rather than employers, significant non-monetary incentives for people to purchase health insurance (like “no driver’s license without proof of insurance”), and strong regulation of the private insurance market on either the state or federal level to ensure level playing fields, affordable rates, and appropriate levels of expenditures by private insurers on the actual delivery of health care could ensure broad availability and purchase of individual health insurance.
By instituting a requirement that Medicaid programs cover childless adults, PPACA (provided it survives the current challenges in the U.S. Supreme Court) has taken a giant step towards debunking the notion that if you are an adult, you are somehow unworthy of receiving health care unless you work, or have a an excuse for not working that we deem “worthy” as a society. Now we need to take the next step and de-link health insurance from employment entirely. What are we really afraid of? That people will choose not to work if they can get health insurance without working? When PPACA’s individual mandate becomes effective, would it really be a disaster if purchasing individual health insurance became more attractive than employer-based insurance? Or would it allow people the freedom to change jobs, take risks in their employment, and innovate? And what could be more important to our economy in these times than allowing today’s “slackers” who are unable to find full-time jobs, to be tomorrow’s innovators, as long as they are not derailed by the inability to access quality health care when they need it?