College Media Network - Search the largest news resource for college students by college students Jobs and internships for students -

Health plan hands bill to employees

Published: Sunday, June 7, 2009

Updated: Sunday, June 7, 2009

A bill drafted Friday by Sen. Edward M. Kennedy's health committee will require all employers to offer health care to their employees or pay a penalty, but college students especially should be very skeptical of what this would entail.

While health care shouldn’t be more accessible to some than others in the working world, it’s obvious that employers who are forced to provide it will simply slash wages and cut even more jobs than they already have.

Passing this bill may extend health coverage to some, but it will ultimately prolong the recession for all.                              

We have to ask ourselves, “Would I rather make $5,000 less every year and have a basic-level health care plan assigned to me or would it be better for me to keep the $5,000 and go get my own health insurance?” Or, more importantly, “Will I ever be able to get a job if employers have to keep spending money that they don’t have?”

In 2004, the average annual premium for individual health insurance was $1,786, while premiums for single employer-based coverage averaged $3,383, according to a report published by the Kaiser Family Foundation.

In addition, premiums for employer-sponsored health insurance have been rising four times faster than workers’ earnings since 1999, according to the Kaiser Family Foundation and the Health Research and Educational Trust.

It’s a simple concept: When the cost of benefits an employer must provide rise, the employees are the ones who bear the costs as their wages fall.

An employer who already provides health insurance doesn’t do so out of generosity, but because it attracts workers who might not think they can afford health insurance on their own.

The truth is that better plans can be purchased at more affordable prices if individuals will seek them out on their own.

Recommended: Articles that may interest you

4 comments

Pat
Thu Jun 11 2009 09:31
Yes, health insurance and fringe benefits are used to attract high level employees. I am fully aware of this, and I definitely did not fail economics. But there is a difference between helping to provide health care for your employees and directly purchasing a specific insurance plan. The former can be done by putting money towards an employees Health Savings Account or allotting an amount that employees can use individually to purchase their own plan that best fits themselves and their families. It allows for individuals to shop around for plans that are most cost effective and right for them.

By purchasing health insurance plans directly for employees however, as the current tax system strongly encourages by making such expenses tax exempt, employees have significantly less choice in the specific health plan that covers them and their families. It also makes their health insurance contingent on holding that specific job, and forces them to change plans completely if they switch jobs. Am I suggesting that companies not cover health benefits for their employees? No. I'm merely saying that the tax incentive system needs to be changed to encourage options that provide more individual choice and stability for the employee.

your name
Thu Jun 11 2009 07:27
Pat,

"An employer who already provides health insurance doesn’t do so out of generosity, but because it attracts workers who might not think they can afford health insurance on their own." Good economic understanding of business processes, and certainly correct about the "not out of generosity" part.

If this were true, doctors, lawyers and engineers wouldn’t get health insurance and our friends at Burger King would. Burger King Employees can’t afford it so why don’t they get it? This is not good economic understanding. Health insurance and other fringe benefits are now expected for high level positions and are used to attract and retain employees. You might have majored in history, but you must have failed economics.

While I may agree that this bill shouldn’t pass, this author's argument is uninformed and the arguments are illogical. Another testament to the quality of UCFnews.

Pat
Wed Jun 10 2009 17:47
I'm glad to see what looks like a new political bent to the Future. This is a pretty good article, correct in it's principles but a bit lacking in some of the background on the issue.

"An employer who already provides health insurance doesn’t do so out of generosity, but because it attracts workers who might not think they can afford health insurance on their own." Good economic understanding of business processes, and certainly correct about the "not out of generosity" part. But the employer-based health insurance system is the result of a 60 year old government sponsored tax incentive, not rational free market business thinking.

Following World War II, the government put in place price controls that skewed employee wages. Wages were capped below economic equilibrium, which led businesses to seek other ways to entice the best employees to work for them. Many businesses purchased health insurance plans as an alternative to higher wages. When the price controls were eliminated and Washington caught wind of what had gone on, the politicians' first instinct was to do what they do best: tax it. Businesses were understandably opposed to such a plan, so they successfully lobbied to have this expense rendered tax-exempt. This tax policy has kept alive this perverse corporate health insurance policy for the past 60 years, despite that it's conception was the result of a government f-up.

Instead of ridding the country of the employer-based health insurance system, the Obamacare plan cements it as the central element of our health policy. This is incredibly unadvisable and a horrible direction to take American health policy. Obama should correct the perverse tax incentives that mess up our system and should encourage an individual health insurance exchange to which employers can contribute for their workers' to purchase their own plans.

Your name
Tue Jun 9 2009 08:27
“The truth is that better plans can be purchased at more affordable prices if individuals will seek them out on their own.”

You can make 60% of statistics mean 100% of what you want 50% of the time. I learned in statistics that you can find ways of making statistics say what you want. The answers are typically more complicated than they look.

It is true that there is a middle man cost to corporate healthcare, but the corporate healthcare is typically better than the personal healthcare. People with personal healthcare plans may have cost that won’t be shown in a statistics such as much higher deductibles, limited coverage or a lower scope of coverage. The plans offered to employees by companies compared to those that they find themselves might be completely different.

Whether the government should pass this is a flip of a coin. I lean towards not passing the bill and looking for other methods of reform but I would love to hear more information about what it is that they’re planning to do. Of course, CFF isn’t going to provide any of that because they don’t do any research. Reading Drudge report is not research.

I get the impression that the writing style of the author is to find an article on the Fox News website and rewrite it to include useless hypothetical imagery or not so hard hitting questions to the reader. I also find it interesting that the Florida Alligator tends to write long and detailed stances while CFF writes choppy bits. Are they more motivated than CFF to write?







log out