Jonathan Oberlander wrote in the New England Journal of Medicine that a Medicare for All healthcare proposal would generate “fierce resistance from conservatives and the business community.” Conservatives, yes. But as Berkshire Hathaway, JP Morgan, and Amazon demonstrated last month, the business community as a whole may not be as resistant to universal public health insurance as is generally believed.
The three corporate behemoths announced in a February statement that they would begin the formation of a health care company to cover all employees of the three companies. The new health firm, which would cut health care costs that companies incur through employer-provided health insurance plans, would be “free from profitmaking incentives and constraints.” Berkshire’s Warren Buffett, a proponent of Medicare for All, derided high health care costs as acting “as a hungry tapeworm on the American economy.”
While the merits and pitfalls of a single payer health insurance system can still be debated, it would be best if we threw away the assumption that American businesses would immediately react negatively to this significant expansion of government. According to the Bureau of Labor Statistics, health insurance coverage is the largest employee-related expenditure incurred by businesses, larger than contributions to Medicare and Social Security. Only salaries and wages constitute a larger portion.
This clearly isn’t lost on American businesses. General Motors claims that health insurance costs add an additional $1,500 to the cost of their cars. Starbucks spends more money on healthcare than it does on coffee. Columnist and consulting firm owner Gene Marks, a self-described “smaller-government, fiscally right-of-center guy,” made his case for single payer in the Washington Post:
Every year–and I mean every year–my clients have suffered with double-digit increases in their healthcare costs…In addition to the cost of premiums, even companies with as little as five or 10 people wind up paying for the time a manager has to spend internally dealing with the administrative headaches of their health plans…’If we choose to have a single-payer system, big government will make a mess of it like they always do,’ people say. More than the mess we already have? More than the mess of Obamacare or what Congress is currently proposing?
Richard Master, CEO of MSC Industries, concurs by saying Single Payer “costs less for the company in basic care, and it will take away from the company the requirement that they are responsible for providing medical care for employees.” Master signed and helped draft a letter to President Trump which reads: “The business sector spends more on administering and paying for employee health benefits than it gains in net profits. This makes it impossible for US corporations to compete internationally with countries that have a universal, national health system funded by taxpayers…Small and medium-sized businesses have ranked healthcare costs as a major concern for more than 25 years.”
The list of complaints goes on and on; given this context, it’s hard to see how universal health coverage provided by someone other than employers would be met with “fierce resistance” from businesses burdened by extreme insurance costs.
The Amazon/Morgan/Berkshire plan isn’t new. GE, Boeing, Lowes, and Walmart all purchase bundled health insurance plans from providers rather than using a private insurance company as an intermediary. Lowes and Walmart, along with McKesson and JetBlue, partnered with the Pacific Business Group on Health (PBGH), a “non-profit, employer-led organization that represents public and employer healthcare purchasers, including numerous Fortune 100 companies.” Again, this cuts out the insurance middleman.
You may notice a recurring trend among PBGH, the Amazon/Berkshire/Morgan health plan, and proposed single payer systems: they’re all non-profit. As Elizabeth Rosenthal wrote in An American Sickness: “Financial incentives to order more and do more–to default to the most expensive treatment for whatever ails you–drive much of our healthcare.” Some of the largest players in the American business community have made it clear that defanging (or eliminating) the insurance industry by stripping it of said financial incentives will be better off for the economy overall.
The issue with the aforementioned non-profit business proposals is that they don’t cover the entire country, and are therefore not viable solutions to the high cost of healthcare. A universal coverage program (be it through a single payer system or otherwise) which doesn’t involve employer-provided health insurance will be the best booster to the economy from a business perspective. Not only will businesses like Berkshire and Amazon not have to fund non-profit insurance companies, they won’t have to cover health insurance at all. Rosenthal poses a simple but serious question: The price of your car “doesn’t depend on your employer, or if you’re self-employed or unemployed. Why does it matter for healthcare?”
It shouldn’t, but it does. This problem need not be exclusive to those who lose their jobs and see their health coverage disappear along with their income. It can be viewed as an economic depressant akin to excessive taxes or regulation which stifles all businesses, large and small. The sooner this old, harmful system is finally done away with, the better.
Photo: Irekia/Creative Commons