First, Separate Health Care from Employment

JOANNE JACOBS

April 27, 1993|By JOANNE JACOBS

San Jose, California. -- Sales are picking up at XYZ Unlimited, and Ralph could use new full-time workers. He debates whether to ask his 40 current employees to work five hours of overtime a week, or whether it would make more sense to hire 10 part-timers.

Why doesn't he just hire five new full-timers? You know the answer: Medical benefits.

Martha would like to quit her full-time job, move to her hometown and get a new job, maybe part-time.

But she's got to hold on to her job for dear life: She has benefits and she can't afford to lose them, because she also has a ''pre-existing'' medical condition. Living near family and friends would help cope with her illness, but without the guarantee that she could get into a new health plan, it's impossible.

Our current health-care system, based on employer-provided insurance, is messing up people's lives, distorting economic choices and hiding the true cost of health care.

I'd like to throw a modest proposal on the operating table: If we're going to reform the health-insurance system, let's start by separating health insurance from employment.

One of the ideas floated by the health-reform task force is to require all employers to provide health coverage, with the employer paying at least 75 percent of the cost. A ''health-care unemployment insurance'' tax would be deducted from paychecks to cover those who lose their insurance by losing their jobs.

For an administration that wants jobs, jobs, jobs, this is dumb, dumb, dumb.

Drop ''pay or play,'' payroll taxes to fund universal care, mandated coverage -- any system that makes health coverage a function of where you work and how many hours you work.

Hillary Rodham Clinton's brave new health system -- whatever it is -- should be paid for by raising income taxes or sin taxes or value-added taxes; it doesn't make sense to tax people for creating jobs -- or to add another layer of mandates and benefits to the current patchwork system.

There is no intrinsic link, after all, between employment and health: People don't get sick when they get a job; they don't become healthy when they lose it.

The fact that most people get health insurance through their employers is a historical accident: It started during World War II, when employers lured skilled workers with free health care to evade wartime wage limits, which prevented offering more money.

As it caught on, and more Americans paid less of their medical bills, costs went up. After all, there is no ''enough'' in health care, no point at which an individual sees no possible benefit in another visit to the doctor, another test or another procedure -- if somebody else is paying the bills.

Now, our health-insurance system is built around the expectation that employers should pay for health insurance -- at least for full-time workers.

Bank of America, which is making most of its work force part-time, has taken criticism for leaving employees uninsured. But the trend is not confined to the competitive business world: Palo Alto Unified School District trustees recently heard Hispanic parents' pleas to create a full-time job for a former bilingual outreach worker, who'd proved her competence and her dedication to students and their families. The board voted to hire two people, each to work three hours and 45 minutes a day. It's cheaper. No benefits.

Fred's burned out doing the same old job, so he's planning to quit and start a business. His wife has a job, with health benefits, so he can afford to try something new.

Frederika's sick of her job, too, though somebody else might be delighted to have it. She'd like to work for herself, but fear of losing benefits traps where she is.

People are clinging to jobs they don't like, not so much for fear of losing the salary as for fear of losing health insurance.

Suzanne and her two kids are stuck on welfare. She's got the skills to earn $6 an hour, which is more than she'd get from AFDC, but once all the deductions are taken from her paycheck, it's pretty close. And AFDC includes Medi-Cal benefits, full coverage for her family, while no employer needs her semi-skilled services enough to be willing to pay for medical care.

Should Suzanne gamble with her children's health in order to get off welfare? If she does, the first serious illness will push her out of her job and back on AFDC.

Harry is insured as Sally's spouse, but Bert is denied the same benefit, even though he's lived with Ernie for 20 years. As access to health coverage becomes more critical and more expensive, the pressure for domestic-partner laws increases: The stakes of spousal status can be very high.

Edith wants every possible form of care included in her health plan, because she thinks her boss is paying for it. She doesn't know that it's all part of the cost of employing her, and that the premiums in effect are coming right out of her paycheck.

Her doctor tells her it's very unlikely her headaches are caused by a brain tumor, but says he'll order a high-tech scan if she wants to make sure.

Why not?

Joanne Jacobs is a columnist for the San Jose Mercury News.

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