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Employment not a requirement for health insurance…good thing or bad thing?

I was reading an article in the Boston Globe about the changes coming as part of the Affordable Care Act (a.k.a. “Obamacare”).With the development of Insurance Exchanges, many people will have the opportunity to purchase affordable health insurance on their own and not be reliant on employers to provide it. As a small business owner I have often wondered why insurance was tied to employment in the first place. We don’t get home insurance or car insurance as a capacity of employment…so why health insurance. For years I have thought it would make more sense to have people go to their insurance agent and purchase healthcare as an individual…the agent would have a variety of insurance products to choose from and because everyone would do it this way, it would drive prices down because insurance companies would really have to compete for clients. As it is now, an employer signs up all their employees with an insurance company and that company can gouge them on pricing…and they do. This leads to increases in premiums to the employer, costs passed on the employee, people not being able to choose plans that really work for them, etc, etc.

Working in healthcare I get to see this from multiple angles…as an employer, a provider and as a patient sometimes. As an employer I have watched my costs rise every year…sometimes by 15% or more. As a provider, I actually see my reimbursement decreasing almost every year…I can’t think of the last time that we had a rate increase. As a patient I see my co-payments and deductibles increase each year and also find more restrictive coverage. So who is making money here? The insurance companies! So hopefully moving to these exchanges will cause them to start to be more competitive with their rates.

The one thing I didn’t think of was the new mobility people would have in the workforce. Not having to stay in a job you dislike only because it’s the only way you can afford insurance might be a thing of the past. I would imagine this could really help some people that dream of starting their own business, or maybe do some freelance work but haven’t been able to do it because they need insurance…they are free now…free to dream, free to create, free to switch jobs…it could be great! Or, it could really be a mess for employers with people constantly job hopping…

The requirement for employers of certain sized companies to provide a portion of insurance still exists, so we won’t be a totally wide open market when these portions of the Affordable Care Act kick in…but we just might be at the beginning of a whole new way of thinking. The jury is still out.

Michael Vacon, PT
Managing Partner