Thursday, October 10, 2013

Buried Treasure: A Hidden Gem in Obmacare

Although as an expatriate, I'm not eligible for coverage under the Affordable Health Act, (and as a retiree living outside the U.S., not even Medicare for that matter), I'm glad to see that the ACA has finally been enacted.  One outstanding plus about Obamacare not often mentioned is that it may well end job lock, which is the refusal of workers to leaveor to fear of getting fired fromjobs that they hate because their  employers offer badly needed health insurance at still relatively affordable rates. vs. those for an individual policy.  And as discussed below, therein lies the problem. (BTW as one who had "been there, done that" in my working years, I sympathize with those who are putting up with such employment conditions.)

Instead, under Obamacare, those in the labor force will be able to obtain insurance on their own at affordable rates. In doing so, job lock employees would be able to switch to companies that don't offer health insurance benefits, thereby giving workers more freedom when seeking or changing employment. In turn this could level the playing field and stimulate the job market as workers would no longer be at sharp disadvantage in this area in making decisions about working for such prospective employers.

Moreover, the system of employer-sponsored health plans (which was introduced in a full labor market  during World War II in lieu of pay raises that were restricted due to government imposed wage controls)  has lost its usefulness.  Over the past several years  premiums and co-pays have increased, wages adjusted for inflation have dropped,  and unemployment has soared. This is especially the case since the Great Recession. Meanwhile, individual insurance premiums have become prohibitively expensive for many Americans, especially those who are older and / or have pre-existing health conditions. Obviously, something needed to be done.

Yet it seems that the mindset of workers in the U.S. has nevertheless continued to be one of denial by ignoring the flaws in this "fringe benefit"(especially the fact that  employer sponsored health insurance terminates when the employee does and that COBRA can be very expensive), a misplaced attitude that has only aggravated the problem.  Maybe it would actually been better in the long run  if businesses had totally abandoned health care coverage long before now,  as employees' dependence on this ultimately unreliable source of protection artificially only delayed a day of reckoning and popular demand fornot to mention the  necessity ofgovernment sponsored insurance for the working people.  In other words, if workers had been more realistic about the limitations of  their companies' interest in their welfare, then America might have enjoyed Medicare for all by now.

Meanwhile, here in the Philippines, the government healthcare plan, Philhealth. which is already very popular  is aiming for universal coverage by 2016. Wouldn't it be sad if a third-world country were to implement a single payer plan for all ahead of America? One can only hope that the Obamacare will also eventually evolve into such a system, just like those in other first world countries and in at least one less developed nation as well. 

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