Unbiased Analysis of Today's Healthcare Issues
Should employers provide health insurance to their employees? There are many reasons why they should. One is that employees are attracted to firms that offer health insurance, especially since their are tax and cost advantages to group health insurance purchased through an employer. Another reason is that if a worker becomes sick, that reduces productivity.…
Gruber (1994) shows that the costs of employer-provided health insurance benefits are passed on to employees through lower wages. But do employees with higher expected medical expenses have their wages reduced by a higher amount to reflect the additional medical costs to employers? This may not be the case if employers can not observe the…
In this blog, I have written about the Swiss (part one, part two) and Dutch healthcare system extensively. Both systems have a “regulated competition” where insurance is mandatory and insurance companies are mandated to provide a specific insurance benefit package. In the Swiss system, 85% of medical expenditures are financed by insurance premiums and 15%…
Devon M. Herrick writes an article (“Why rent…“) creating a clever analogy comparing HSAs to equity in a house. He likens traditional health insurance to renting a home, while having a Health Savings Account (HSA) is more like owning the home. Making contributions to HSAs in essence gives you “equity” towards future health care expenses.…
The San Diego Union Tribune has an article (“Cross-border coverage“) profiling entreprenuer Jim Arriola and his low cost health insurance plan covering medical care in both the U.S. and Mexico. His company, Sekure Healthcare, provides a limited-benefit insurance program through employers along with a discount health card program. Both can be used by Sekure members…
Government provided health insurance may have advantages, but one of the drawbacks are that these programs are expensive. According to the Boston Globe (“Subsidized care plan’s cost to double“), the cost of the Commonwealth Care program will increase from $158 million in 2007 to 1.35 billion by 2011 mostly due to increased enrollment. Enrollment is…
When I pay for health insurance, is most of my monthly premium going for medical care? Or does most of the money go towards administrative expenses and insurance company profit? John Aloysius Cogan Jr. of the Regulating Health Insurance blog finds that most of the money spent on insurance premiums in fact goes towards providing…
An explanation for the recent General Motors-United Auto Workers deal is pretty simple: it is a transfer of risk. GM will set up a Voluntary Employee Beneficiary Association (VEBA) which will be controlled by the union. According to the Detroit Free Press (” UAW ratifies”) GM will place about $30 billion dollars in the account…