Why aren't employers, who complain constantly about the cost of employee health benefits, begging and pleading for government to take health insurance away from them? That's the question Ezra Klein asks in a smart post over at the American Prospect site:
The big question here, of course, is employers. Why they haven't risen up and demanded an end to the employer-based health care market is one of the questions that I've never been able to answer. Why does GM want to build cars and also provide health insurance? Why does Google want to be both a tech company and a medical coverage provider? It's absurd. But employers, for reasons that are beyond me, insist they have a central role to play in this marketplace. That is, for now, true. But in a normative sense, it should not be true, and in a more concrete sense, it's very hard to say why they want it to be true.
Having pondered the same question, I think the biggest issue is control.
Imagine you are a large employer and that you want to reduce the money you're spending on your employee health benefits. You have plenty of options. You can thin out the benefit package. You can shift more costs onto your workers, in the form of higher out-of-pocket payments. Or you can manipulate your workforce--say, by replacing old full-timers with young independent contractors--in ways that would reduce your liability.
Now along comes universal coverage. Even if the plan envisions everybody getting insurance on their own, through either a government-run plan or a menu of private plans, Washington is probably going to demand you pick up part of the cost in the form of a tax. (It might be called a "contribution," but it's the same as a tax functionally.) You can't change this financial liability so easily. And if the government raises that tax in future years, in order to pay for benefits you wouldn't give your employees, you won't be able to do much about it.
Of course, you still might be better off than you are today. As employers are fast discovering, their ability to control costs now is pretty limited--even with all of those levers at their disposal--thanks to the inadequacies of our present insurance arrangements. (The insurance market squanders tons of money on administration and profit; there are all sorts of hidden costs because of uncompensated care to the uninsured; there's no system for cracking down on wasteful, ineffective treatments; etc.)
Besides, as an employer, you have a voice in Washington. Mabye you belong to a trade association, like the National Association of Manufacturers or the Chamber of Commerce. Maybe you're big enough that you have lobbyists of your own. Either way, it's a safe bet the government won't be raising your taxes at will. It will involve political fights and you're going to win most of those.
That logic is, more or less, why at least a few prominent business executives have, in fact, lobbied for universal coverage--even if it means getting rid of employer-sponsored coverage as we now know it.
But those figures remain a distinct minority. And the reason for that, I think, is pure ideology. CEOs just hate the idea of government meddling in the economy, although perhaps the government's rescue of Wall Street will start to change that perception, as well.
--Jonathan Cohn