Something the WSJ hasn’t taken up yet, and really, really needs to be addressed in this whole health-care-reform debate: The way our current insurance system supresses entrepreneurship.
What works well right now is the company-sponsored health insurance plan. Go to work for a large organization with good benefits, and you’re in pretty good shape, healthcare-wise. Thus it goes against the grain, when thinking about improving access to health care, to do anything to fiddle with the one part of our system that is actually providing decent care.
–> But because it is the *only* method that is working well, people who need good insurance at an affordable rate are essentially barred from entrepreneurship.
It needn’t be this way. There is nothing special about insurance pools formed by grouping co-workers. Individuals could be be grouped by location, by industry, by favorite color — however you like, the principle of pooling risk works the same, as long as you have a large number of buyers over whom to spread the risk.
–> A reform of the insurance industry could open up affordable insurance options to individual buyers, regardless of their employer. Transparent pricing policies would further enable individuals to make confident health care purchases without relying on an insurance company to do all the negotiating for reasonable rates.
But as the system stands now, large companies are able to suck in a disproportionate amount of talent because they hold the key to reliable, affordable health care. And specifically, they are able to suck in over-qualified talent because of the cost/price differential between health care costs in the corporate versus the individual markets.
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People work around it. You start your own business on the evenings and weekends, and hold onto the corporate job until you finally have enough income to go on your own. Or your spouse works the corporate job, any job, just to get the benefits, so you can be covered while you get the business up and running. As you grow your little company, at first you try to hire employees who already have insurance through a parent or spouse or a 2nd job. There are ways to work the system.
But I think economically it is a drain. We would be better off– and better able to whether economic downturns — if our structures for providing health care were more favorable towards entrepreneurship and small businesses.