We expect private health insurers to be anti Medicare For All (M4A). Criticizing M4A proposals is just time and money to them, and they have plenty of both. They have no desire to reduce the cost and complexity of health insurance or health care. Besides, you can’t solve a problem that you do not think exists. Attacking something without coming up with a better solution is easy and unfair, but even these tactics would not work for private health insurers without the support of their major corporate clients. So why do major corporations back the health care status quo, and why do we reward corporations that don’t support affordable health care for all?

It’s A Bro Thing, A Control Thing, And A Money Thing

It was just over one year ago that Amazon, Berkshire Hathaway, and JPMorgan Chase announced their joint health care venture. The three business giants said they were combining forces to “provide low-cost, high quality service from a (health care) company ‘free from profit-making incentives and constraints.” But soon after the announcement one of the Big 3, JPMorgan Chase CEO, Jamie Dimon, promised not to compete with private health insurers and would instead restrict the new venture’s efforts to helping the employees of the three companies. We know why Jamie tried to walk back his threat to upend private health insurance—some of his company’s clients are in the health care industry—but why do other major companies support the industry, and do not publicly support Medicare For All?

I can think of a few reasons.

Despite surveys showing that health care costs are a major concern of all private companies, large companies seem to prefer private health insurance to a government-run or universal system. No major corporation has cut all ties with the health insurance status quo. Instead, corporations work with major health insurers to support each other's profits and shareholder returns at the expense of the country. Also, many leaders of “American industry” believe that they know more about health insurance and health care than health care policy analysts, government officials, and economists. They think the private sector is just generally better at running any business even if it has public policy implications.

Let’s not kid ourselves, corporate America rules this country and private businesses are more powerful when they stand together. They think that what happens to one of them could someday happen to any of them. But that’s not all there is to corporate anti health care reform—employee control and money are important too.

For decades employers have noted the importance of offering health insurance to attract and retain workers. Businesses attract workers by offering health insurance plans that cover more benefits than are generally needed, which can increase the cost of insurance for everyone. Employers retain workers for the same reason—comprehensive coverage at a better price than workers can get on their own. And, if an employee or family member has a chronic health condition, guaranteed access to insurance and continuity of care trump job satisfaction most of the time. Bottom line, employment-based health insurance reduces expensive turnover costs for employers.

One more reason major employers want to sponsor health insurance for their employees, is the tax savings they get. The portion of the health insurance premiums both employers and employees pay aren’t subject to federal income or payroll taxes. Employer-sponsored health insurance premiums are exempt from state (with a few exceptions) taxation also. The federal tax subsidy for employer health insurance is the government’s largest tax expenditure, and according to estimates, cost $280 billion in 2018. This enormous outlay, if removed from the employment realm, could go towards funding a universal health care system, and reduce the incentive to provide more insured health benefits than is necessary.

It’s Our Own Damn Fault

We allow corporations to continue to offer health insurance at great expense to the overall economy because so many organizations and people benefit from the current system. And as the late Uwe Reinhardt pointed out, there's "the illusion that employer-provided health insurance is an unearned gift bestowed on them (employees) by the owners and paid with the owner's money."

Through annual indoctrination sessions, also known as open enrollment, employers set out to convince workers that their employer-sponsored health insurance is an additional benefit (form of compensation) on top of the wages they receive. But what typically happens each year is employers pass on health insurance premium increases to workers and these increases often exceed any wage increases the employee may get.

Conclusion

I’ll never understand the faith that individuals put in for-profit organizations, but I acknowledge that it exists. Surveys show that large majorities of workers with employer-sponsored health insurance like it and want to keep it. But while we wait for our fellow citizens to wake up and see our health care status quo as the worst possible option of providing and financing medical care, we can at least ask our government to stop subsidizing health insurance premiums for businesses. If corporate America wants to be in the health care business, let them do it on their own dime. I suspect that when employers (and employees) stop receiving tax benefits they did not earn or deserve, Medicare For All becomes a real possibility.

Tags: health insurance , health insurance costs, Tax-exempt health insurance, employer sponsored healthinsurance, Medicare For All