Beginning today and spread over the next three days, the US Supreme Court will take the extraordinary step of scheduling six hours of oral arguments on the constitutionality of the Affordable Care Act. In my series of posts on health care, I have said that I am in favor of the single-payer system and have criticized the Obama administration for their ACA plan, even though it definitely has some good points and repealing it would be a step backwards.
The whole idea of having health insurance supplied by private, profit-seeking companies that is linked to your place of employment is truly bizarre and the fact that it is the norm in the US is a classic demonstration of how people who grow up with a ridiculous system and have never encountered anything different can think that it is perfectly reasonable. (This also explains much of religious beliefs.)
Paul Krugman points to a study by the National Institute for Health Care Reform that says there has been a rapid decline in the number of employers providing health insurance due to the recession. As the study says, things are not going to improve even if the recession eases.
Even when employment rebounds to pre-recession levels, a return to previous levels of employer-sponsored health insurance is unlikely. Well before the start of the recession, a steady decline of employer health coverage was underway with fewer firms offering coverage and fewer workers taking up coverage—likely because of rising health care costs. Both of these trends continued during the recession and contributed to the decline in employer coverage between 2007 and 2010. The core threat to employer health coverage is health care costs increasing faster than wages, which makes employer coverage unaffordable for a larger share of the workforce, particularly low-wage workers. For example, among children and working-age adults with incomes below 200 percent of poverty—$44,100 for a family of four in 2010— the proportion with employer coverage dropped from 42 percent in 2001 to 24 percent in 2010.
You can see in this figure from the study how the loss in coverage affects lower income groups more than the higher ones.
In the short term, this is really bad news because it means that many people, especially those who can least afford it, will find themselves confronted with the unpalatable options of not having any health insurance or buying expensive individual policies. Meanwhile even those who retain employer-based insurance are finding that employers are shifting more of the cost to them in the form of higher deductibles and co-pays.
In the long term, this may spur greater interest in the only reasonable option of a universal, state-run, single-payer system that is the norm in almost all countries in the developed world with the US being the sole exception. Even in many developing countries like Sri Lanka, such a system has been in place for a long time.