Travel day, so reupping a post about health insurance with some additional updates.
From the Wall Street Journal. Nothing to see here. Move along…
The Average Cost of a Family Health Insurance Plan Is Now $27,000
Higher spending on chronic diseases, weight-loss drugs and hospital bills help drive the increase
“The cost of health insurance rose steeply for a third year in a row in 2025, reaching just under $27,000 for a family plan, according to an annual survey from the nonprofit KFF, which provides the broadest picture of U.S. employer health coverage.
…The cost is rising faster than inflation, and economists and business leaders said it could bite into employment and wage growth.
“If healthcare costs go up faster than the economy in general, that means there’s less money left over to go to wages,” said Gary Claxton, a senior vice president at KFF.”
A quick reminder: the employer offered healthcare model arose essentially by accident. During WWII, wages were frozen, and companies began offering extra benefits as a way to compete for labor (2 ORIGINS AND EVOLUTION OF EMPLOYMENT-BASED HEALTH BENEFITS | Employment and Health Benefits: A Connection at Risk | The National Academies Press).
Here’s the thing: Any organization that offers healthcare coverage, insurance or reimbursement, is actually in two lines of business: 1) whatever product/service they offer, and 2) healthcare. And for most of the organizations, #2 - healthcare - is not their core competency.
This is, not to be overly dramatic, insane. Ok - maybe that’s a bit dramatic - but it is basically true.
The employer-sponsored healthcare model has two distinct major disadvantages (and many more minor ones as well). First, it increases costs for whatever product/service a specific company sells (every vehicle made in America has a hidden premium (or a hidden tax) of several thousand dollars due to healthcare costs incurred by the company producing that vehicle). Second, every USA-based company is less competitive against foreign competitors due to this “hidden healthcare tax” baked into their corporate costs.
No other country in the developed world utilizes this ridiculous model for covering the costs of healthcare for its population.
This has to change…
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Yesterday, I wrote a short post about how candidates could talk about Medicare for All on the stump.
I’ll repeat some of what I wrote:
So how to counter these healthcare accusations on the stump and take back Home Field Advantage?
My thoughts:
Pivot to Government Subsidizing Private Companies. Immediately turn the “socialist” accusation around to how for-profit insurers privatize profits and socialize costs. Something along the lines of “You know who is benefitting from the very socialism they scream about? Medicare Advantage corporate insurers who are paid by the government because they couldn’t make money insuring our parents and grandparents otherwise. You know who else cashes in? Private corporate employers and their CEOs who get a tax break for providing insurance to their employees.”
Point Out the Insanity of People Having to Literally Predict Their Future Health When Choosing Insurance (see my post: Choice. It's What's for Dinner). Something along the lines of, “You know what’s really crazy? People having to literally guess what their (and their family’s) health will be in the future so they can choose the proper coverage. Will someone in my family get sick or injured next year? What drugs will I need next year? Will I be somewhere “out of network” when I need healthcare next year? You know who doesn’t have to make these ridiculous guesses and choices? Every resident of every other developed country in the world.”
Point Out That Medicare is More Efficient Than Private Insurance. How about this: “Did you know that administrative overhead for Medicare and Medicaid runs at about 2-4%, while private insurers suck up around 15-20% for overhead and profit? That’s billions of dollars being diverted to “middlemen” private corporations, shareholders and CEOs instead of going to improve you and your family’s health.”
Commenter Joe M. brought some additional points to my attention that I regularly spoke about on the campaign trail as a federal candidate and which I overlooked in my previous post. These points are important enough that I wanted to make sure they are included in my “stump suggestions”.
They are:
Point Out That We Force Businesses to Be Healthcare Managers. Push back with something along these lines: “Our current “system” forces every major corporation - and most small businesses - in the United States to be in two lines of work: first, whatever product(s) or service(s) are their core competency, and second, providing healthcare insurance and management for their employees. In a competitive global economy, this may be one of the most anti-competitive burdens that could be placed on American business in the private sector.”
Point Out That Employer-Provided Health Insurance is a Hidden Tax That is Baked into Everything We Sell in This Country. Use an example to illustrate this point. Perhaps something like this: “The cost of every automobile manufactured in the US has several thousand dollars of “healthcare” cost embedded in the price that other auto manufacturers in other countries don’t have. Again, this is absolutely anti-competitive in a global marketplace.”
The truth is there is no free lunch and money is fungible. Every other developed country manages to provide affordable universal healthcare for its people, paid for through taxes, at a significantly lower cost per person than our system here in the United States.
Moving to Medicare for All will likely require an increase in individual tax burdens. However, it should result in measurably lower costs: for medical goods and services including administrative overhead, profit, prescription drugs, hospital and physician care, as well as reduced health spending from having healthier people due to universal coverage; for almost every retail good and service; as well as higher wages/compensation for workers (due to reduced expense burdens on the businesses for which they work.
Candidates on the campaign trail should not be afraid of M4A. Those who favor such a system should vigorously and passionately inform the voters of the wide-ranging benefits - and reduced costs - of such a system. M4A is a life saver, it’s a money saver, and it makes our private sector more competitive. Win-win-win all the way around (except, to be fair, for shareholders, CEOs and, yes, some dislocation of workers in private insurance companies who may be able to find work elsewhere in the newly structured healthcare system).
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I want to highlight one key point in the Medicare for All debate.
It is very likely that turning to a universal healthcare system with standardized insurance through either a single payer system or a system of highly regulated, standardized private non-profit insurers will result in unleashing positive economic forces that will juice the economy for years to come.
Several reasons:
As I wrote above, most private employers are in two lines of work: selling their product(s)/service(s) and managing the healthcare of their employees. Lifting this burden will allow companies to focus and apply all their resources on the core competency, likely increasing profitability and, hopefully, along with it, worker compensation
For those businesses that do offer employer-based health insurance, this serves as hidden tax that is baked into every product/service they provide. Take away that burden and the cost to provide those product/services will decrease significantly, making American businesses more competitive in a global economy.
Finally, our current employer-base healthcare system tends to lock people into their jobs for fear of losing healthcare insurance/benefits. Providing universal standardized access to healthcare should unleash the entrepreneurial potential of potentially millions of people, as well as allowing workers more flexibility in finding the job or career that is right for them, regardless of their health issues or the cost of healthcare.
Abdul El Sayed’s main tagline throughout his primary and general election campaigns was, “Money out of politics, putting money in your pockets, passing Medicare for All”. It is actually spot on.
Democrats need to be bold in showing voters that they are going to take immediate and meaningful - if seemingly politically risky - action to improve people’s lives. Standardized, universal access to affordable healthcare is at the top of the list.
Many supposedly “moderate” political pundits (Ezra Douthglesias. IYKYK) believed that taking on immigration as a losing battle for Democrats as Republicans had historically owned the issue.
They were wrong.
The same goes for healthcare. The latest Economist/You Gov poll done Nov 4 - 6 showed M4A support at 60%, with 30% opposed. Political pundits across the spectrum thought Dems should stay away from M4A; even Democratic doctor Ezekiel Emmanuel said so in the recent past.
They are wrong.
The time is now.
Neil Diamond - The Time is Now
