Wednesday, March 30, 2016

Dramatic Health Care Reform Is Essential for Social Welfare System

I noted initially that I consider single-payer healthcare would be a clever way to make out a nice welfare state. My argument was that our present system is so worse that it has driven health care costs to incredibly high levels. Transitioning to a single-payer system would thus need a large upfront tax hike. But then, as cost reductions slowly kick in, government expenditures on the program would steadily recede. This would gradually free up the revenue from the upfront tax hike for other important welfare benefits that we are presently missing, like child care benefits.


In addition to this Trojan Horse point, it is also significant to remember that dramatic health care reform is necessary to the successful operation of unemployment, leave, and disability benefits. Particularly, those benefits will not operate very smoothly for as long as employer-provided health insurance is the norm.


When you become unemployed, disabled, or take leave (e.g. to care for a newborn child), you are no longer working, but you yet require access to health care. If your health care initially came from your employer, this reality makes an incredible headache. In these cases, you either have to 1) need the employer to shoulder the health care costs even though the individual no longer works for them, 2) shift the cost of health care on to the individual whose loss of income makes it complex for them to shoulder, or 3) put the individual onto a different (public or subsidized) health care plan even though they may only be out of work for a few weeks.


Indeed, you observe all 3 of these approaches in play right now in the US system.

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