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Opinion GM just showed why we have to overhaul our health insurance system

(J.D. Pooley/Getty Images)

As the United Auto Workers strike against General Motors threatens to drag on, the company decided to play hardball: It announced that it is cutting off health benefits for striking workers. Though they will be able to pick up coverage through COBRA with the help of the union — coverage that won’t be as comprehensive — the move sends a clear message that this will be a merciless fight.

Which reminds us of something very important about health-care reform, no matter what form it takes under the next Democratic president: We have to move away from the ridiculous system where the insurance you have, and whether you have insurance at all, is dependent on the benevolence of your boss.

This has already been a point of contention in the presidential race, particularly between former vice president Joe Biden, who has proposed creating a voluntary public insurance plan anyone could buy into, and Sen. Bernie Sanders (I-Vt.), who supports a single-payer Medicare-for-all plan.

As Biden argued at a union event on Tuesday, “You’ve broken your neck to get” health insurance in contract negotiations, and “you’ve given up wages to get it.” He added, “No plan should take it away from you if that’s what you decide.”

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Biden is not the first to argue that it would be unfair to union members to eliminate employer-sponsored insurance if they had to fight for it. Sanders’s response is that if insurance was no longer the responsibility of the employer, they could return what they’re paying now back to workers in the form of wages. When it came up in the last debate, Biden quipped, “For a socialist, you’ve got a lot more confidence in corporate America than I do.” Sanders countered that his labor plan does include features meant to ensure that union workers receive the gains from a transition to Medicare-for-all.

But that’s really a debate about what happens in the immediate aftermath of reform. The more important question is this: Is this any way to run a health insurance system?

Most people have probably never questioned it: You get a job, and if you’re lucky, it comes with health insurance. You boss decides what kind of plan you’re on, and every year he decides if he wants to switch you to a different one (which is why “If you like your plan, you can keep it” is a fiction, no matter who’s saying it). That’s just how things work.

But more than 150 million Americans get health coverage through their jobs not because anyone thought it would be the best way to construct an insurance system. It was an accident of history.

It began in World War II, when the federal government imposed wage and price controls, meaning employers couldn’t offer workers higher wages, so they began paying for health coverage as a way to recruit workers in a tight labor market. Then in 1943, the IRS said employers could deduct the cost of that insurance as a business expense, making it even more attractive. Today, the deductibility of health insurance is the single largest tax expenditure in the federal code; according to the Treasury Department, this year it’s costing the government $203 billion.

The reason saying to people, “We aren’t going to take away your employer-sponsored coverage!” is politically effective is that people are risk-averse and fear losing what they have, particularly in a context where uncertainty can be terrifying. If people have good coverage now — or even coverage that’s just adequate — they’re often reluctant to give it up, even if what they would be getting is something more comprehensive, more secure and less expensive.

But the employer insurance system creates all kinds of problems, like “job lock” (when you can’t leave a job you don’t like, say, to start a business, because you fear losing your coverage), the fact that the deductibility rewards people with higher incomes more or situations like the Hobby Lobby case, where employers get to make personal decisions for their employees based on the employer’s religious beliefs. As Aaron E. Carroll wrote, “There are almost no economists I can think of who wouldn’t favor decoupling insurance from employment.”

Getting health insurance out of the control of employers is one of the best things Medicare-for-all has to offer. But even if you favor a reform that adds a public option, there are different ways to construct that public option and different incentives you could provide for people to shift from their employer plans to the public one. You could even still have a system of primarily private insurance (if that’s what you wanted) that didn’t use employers as a middleman.

Union members are a key Democratic constituency, and it isn’t surprising that many of them don’t want their health insurance benefits threatened, since the coverage unions negotiate is often more comprehensive and features lower out-of-pocket costs than what other workers can expect. But even some union officials are now saying that the GM strike shows that those benefits are vulnerable and can be held hostage by employers or taken away as a negotiating ploy.

We should all try to imagine what it would be like if we never had to worry that our health coverage would be subject to the whims of our boss. It would make for a much less anxious existence, for everyone.

Read more:

Helaine Olen: The GM strike and America’s health-care burden

Paul Waldman: Where is Elizabeth Warren’s health care plan?

Rebecca Kolins Givan: Unions shouldn’t use their health insurance as a weapon against universal coverage

James Downie: Why we need single-payer health care — and ‘health justice’

Megan McArdle: What’s good for GM isn’t necessarily good for America

The Post’s View: You can’t have it all — even with Medicare-for-all