February 2, 2023
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Op/ed: Employer-based health care could soon be put on life support


By Christopher Flavelle

The next big shift is coming in U.S. health care, and Republicans are doing their best to speed it up. What’s not clear is how carefully they’ve thought through the consequences.

A defining feature of U.S. health-care policy is that most Americans get insurance through their employers. That has frustrated liberals’ attempts to rally voters behind Obamacare’s modest reforms, let alone the single-payer model that works so well in most developed countries: the average person has no incentive to support changes that might jeopardize their situation.

Judging by the trend of the past few years, Americans with job-based coverage could soon become a minority. There has been a gradual but steady decline in the portion of the populace with job-based coverage, from 59.2 percent in 2009 to 57.1 percent in 2013; almost everyone 65 and older is covered by Medicare, whether or not they are employed.

The shift away from job-based insurance has been pronounced for most age groups. Among those 55 to 64, for example, the share with job-based coverage fell almost four percentage points from 2009 to 2013. There’s one exception: young adults, who benefited from an Obamacare provision that forces insurers to keep children on their parents’ plan until age 26.

Other parts of Obamacare will accelerate the trend. The Congressional Budget Office estimates that in 2018, 8 million fewer people will have employer-based coverage than would have without the law. If 8 million fewer people 64 or younger had been covered by their employer in 2013, the share of non-elderly Americans with job-based health insurance would have been 54.1 percent.

That drop will be even greater if Republicans succeed at narrowing the category of workers to whom companies must offer affordable health insurance or pay a fine. That protection now extends to anyone at a company with 50 or more employees who works at least 30 hours a week; Republicans want to raise that threshold to 40 hours.

A still greater change would come from repealing the employer mandate entirely, which Republicans may try to pursue if they get more leverage. The latest Supreme Court challenge for Obamacare may give them that opportunity.

It’s debatable whether Republicans have considered the consequences of that push. In the short term, it would reduce the regulatory exposure of U.S. businesses, which explains why U.S. Chamber of Commerce President Thomas Donohue highlighted the campaign in a speech last week.

Over the long term, who wins and who loses gets a lot murkier. Republicans who support decoupling insurance from employment, on the grounds that doing so would free people to change jobs more easily, may see the decline of employer-based insurance as something to cheer.

But there’s another view, one that’s less happy for Republicans. The sooner employer-based coverage becomes something that only a minority of Americans enjoy, the greater the challenge to the psychological barricades against government-sponsored health care — whether that’s Obamacare, as my colleague Megan McArdle has noted, or something more sweeping.

Whether this trend is good or bad depends how you feel about big government. Conservatives who oppose the growth of the redistributive welfare state may find it harder to explain the dangers of government insurance to an electorate that increasingly has no alternative.

• Christopher Flavelle is a columnist for Bloomberg View. Reach him at cflavelle@bloomberg.net.