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Patent Medicine

by Editor on April 24th, 2011

I am an employee. And I am also an employer. That simple duality makes possible some interesting insights into the healthcare debate in the US—and two steps that could be taken to address cost-of-coverage issues by expanding access-to-coverage opportunities.


As an employee, I pay significant premiums for health insurance for my family, north of $1,000/month. Although my employer offers a good subsidy, that subsidy is capped, meaning that it continues to decline as a proportion of my premiums with each year. (Healthcare premium increases have been averaging more than 10% annually for the last decade, a number much higher than inflation or any cost-of-living salary adjustment.) Still, the benefits of the program are clear, most notably that the negotiated rate to insure my family is less than I would pay if I bought the coverage myself, directly. After all, that is a large part of the purpose of employer-driven healthcare: cost savings through group buying, along with pre-tax deductions.

However good this is, though, there are limitations. I work for a small company, which means our ability to negotiate rates is limited. Stupidly, the law prevents companies like mine from joining forces with other small businesses to create a consortium—to get more people into a single plan, and therefore more people paying negotiated rates. Whether in a place like Manhattan or on Main Street, USA, this approach undermines the purpose of insurance; allowing businesses to buy plans together easily would deliver more customers and support the overarching health of the nation. Any actuarial issues, such as concerns about different jobs and different health risks, could be accommodated by defining how consortiums can be created, rather than simply ruling them out.


If I feel fortunate as an employee, I feel stuck as an employer. We have two household employees: part-time childcare workers, legal employees who pay their payroll taxes, and for whom we carry state-mandated worker’s compensation and disability insurance. It couldn’t be more above-board. We also pay them a salary that averages out to a bit more than $16.50 an hour. According to data from the Center for the Child Care Workforce, that is 70% more than the national average for childcare workers ($9.73/hour) and 44% more than the average wage for childcare workers in New York State. If you factor in more than 4 weeks of paid vacation a year, plus food when they are working, it isn’t ungenerous.

Yet there’s no healthcare benefit. As generous as I would like to be, I cannot afford it, and as a household employer with two part-time employees, I have no bargaining power to command lower insurance premiums, even if I didn’t subsidize them.

That situation is more than just unfortunate. It puts stresses—and costs—on other parts of our economy and our healthcare infrastructure, in ways that are extremely detrimental and short-sighted. For example, when one of our babysitters was sick recently, she had to visit the ER for treatment, and then spent the night in a hospital bed. Ultimately, most of the cost for that will be paid for by us—not us, her employers, but “us,” American taxpayers generally, through government healthcare programs for the un- or under-insured. Unfortunately for our employee, a visit to the ER is cheaper for her than a visit to a private doctor, because without insurance, most doctor’s fees are costly. (That is not even taking into consideration the costs and stresses to us as employers, faced with finding an immediate solution to a childcare need.)

According to the Bureau of Labor Statistics (BLS), there were 1.3 million child care workers in the US in 2008, 33% percent of whom were self-employed. The BLS also forecasts 11% growth in this area through 2018, predicated in part on the importance of child care to the overall economy, by freeing parents to work in other jobs. (The BLS does not make clear whether those are 1.3 million employees reporting their income, or if it includes what is likely a significant portion of household / child care workers in the gray economy.) It is difficult to find good statistics on how many of these 1.3 million child care workers have health insurance, but the odds are that most of them do not, particularly if they are household employees like ours.

News stories on the scope on healthcare in America talk about the roughly 40 million uninsured people, but rarely delve into whether these people are employed in jobs that cannot give them affordable insurance. And those BLS statistics are separate from an exploration of others working at the lower end of the economy, as part-time household employees doing cleaning or yard-work. For example, there are statistics on those working as maids and housekeeping cleaners: 887,890 people as of 2009, with average annual earnings of $20,840. But that is hardly enough to afford health insurance and, in any case, this data does not include those who are self-employed, people who may be even less likely to have insurance, unless they are married to someone who has it.

My modest solution to the insurance problem here would be a law extending coverage through group plans, as directed by members of the group. Not for free, but for the same negotiated rate as part of one’s extended family, or perhaps through an additional, per-individual rate as part of the group. This simple change would make it possible to embrace a huge portion of the uninsured throughout the country. Moreover, it should benefit the insurance companies as well as the individuals: the companies get more people paying premiums, while the individuals get access to healthcare service necessary to keep themselves and the broader population healthy.

We have a national calling to a higher purpose on this issue, one that is conveniently overlooked by all those Tea Party-loving “Constitutionalists” out there. Our failure as a society to tackle this problem—even to enact simple solutions that would support the expansion of health insurance—is not just to my detriment, or that of our childcare employees. It’s a national disgrace.

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