With ever-increasing healthcare costs for American businesses and workers, why don’t we see greater support for a single-payer healthcare system from the business community? It seems to me that American business is at a disadvantage to foreign competition that doesn’t have to provide health care to its workforce. The U.S. has the world’s most expensive health care system. In 2019, health care spending reached nearly $4 trillion, according to the Centers for Medicare & Medicaid Services.
Medicare for All, a single-payer health care proposal, has recently grown in popularity in the U.S., backed by progressive lawmakers like Vermont Senator Bernie Sanders and Massachusetts Senator Elizabeth Warren. Despite the costs of health care, our current system is advantageous for some companies. Chad Stecher, an assistant professor of health economics at Arizona State University, said big tech companies like Amazon or Facebook can attract star talent by offering compelling benefits, including health care.
Employers ended up paying 67% of medical premiums for family coverage plans in March 2020, and contributed an annual average of almost $14,000 per family, according to data from the Bureau of Labor Statistics. “It’s in their interest to preserve that advantage over upstart companies that certainly won’t be able to compete with them on health insurance,” Stecher said.
A 2020 study in the journal PLOS Medicine found that a single-payer health care system would save money for the U.S. or individual states over time. Savings from a simplified payment administration and lowered drug prices, among other mechanisms, ranged from between 3% and 27% during the first year, according to the researchers’ economic models. In a single-payer health care system, a single entity — likely the government — pays for medical costs, as opposed to people having to pay for medical expenses through their employer or the open market.
With the uniform payroll tax of the single-payer system, Hsiao said, industries will probably end up paying more than they currently do. William Hsiao, an emeritus professor of economics at the Harvard T.H. Chan School of public health, said that industries employing younger workers, like the tech industry, are more likely to be opposed to single-payer health care because the health insurance premiums of those workers tend to be lower.
Another reason some companies are against a single-payer system simply has to do with ideology, Hsiao said — many believe the government should just “stay out of it.” Then there are the businesses without a position on single-payer, which Hsiao said he thinks are in the majority. Hsiao said these companies think they don’t have anything to gain from the implementation of the system — that workers would probably demand higher pay if the company wasn’t covering their health insurance. For a sense of that: A California Senate committee in 2017 found a single-payer plan in the state would cost $400 billion a year, which could be paid for with a 15% payroll tax.
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