University of Colorado economics professor Jeffrey Zax has me convinced.
According to the latest U.S. Census Bureau numbers, around 767,000 Coloradans are without health insurance.
That’s approximately 17 percent of the population, which is slightly above the 15.7 percent national average.
We don’t know how many of the uninsured are twenty-somethings who believe they’ll never fall ill. We don’t know how many are just cheap or how many needy families simply aren’t aware that they’re eligible for Medicaid.
What we do know is that insurance costs are becoming increasingly unreasonable for everyone.
So, what do we do?
In Massachusetts, Gov. Mitt Romney has unveiled an initiative that treats health insurance as an “individual mandate”: In other words, you find some form of health insurance or we’ll garnish your wages.
A key part of Romney’s proposal calls for amending state law to persuade private insurers to offer inexpensive health plans. The state would also do its best to enroll residents eligible for Medicaid and help with subsidized insurance for other lower-income residents.
But how do you “persuade” companies to lower prices without generating more competition among them?
Here in Colorado, professor Zax may have the answer. He believes we should eliminate the employer. Just extend the tax breaks companies already receive to individuals.
“The employers are making decisions for you that you would probably be better suited to make,” Zax explains. “On your own, you would have a wider range of choices. Thus, presumably, you would take advantage of this by making choices … tailored to suit your individual needs.”
Zax predicts that tax breaks would induce many employees to buy their own health insurance.
In fact, he believes a specialist industry – similar to mortgage brokers – would emerge to do a superior job of aggressively negotiating with health insurance companies to minimize costs.
“Right now, your human resources department thinks it is trying to make good decisions for you,” Zax says. “But it has a conflict of interest. It is helping you but it is also trying to keep costs low for the company.”
Obviously, in each large company, there is a diverse community of employees. Some employees may have children, others may be single; some employees smoke, others exercise daily.
All of them have unique health-care needs and budgets.
Allowing consumers to coalesce into smaller, organic, pools – single parents or younger, healthier employees, for instance – would allow customized plans to emerge, which would bring better service and more competitive prices.
What about those who will yell: “The company pays for it now! Why on Earth would I ever leave?”
Zax hopes those folks understand that when employers calculate your salary, they consider health insurance costs as well. He hopes Coloradans realize that salaries would soon rise to reflect these savings. Some employers would likely offer monetary incentives to ease the insurance burden.
Then again, no one would force you to leave the company plan.
But there are other unintentional, often intrusive, costs inherent with employer-run health insurance.
“One of the bizarre consequences, on some level, is that your employer is deciding who’s in your family,” Zax explains, pointing to same-sex couples and other non-traditional families. “There is no reason an employer should be part of that conversation.”
And the conversation for further socializing medicine – for limiting choice – should end. There are other market-based solutions that can work.
If we listen.
David Harsanyi’s column appears Monday and Thursday.
Reach him at 303-820-1255 or dharsanyi@denverpost.com.
