Sunday, September 21, 2008

Self-employed might lose health insurance if they work for someone else

An hour of “What They’re Not Saying – About Your Money” with Roland Martin on CNN, turned up a disturbing observation about our health insurance that neither candidate has apparently addressed directly.

A self-employed man was interviewed. He was covered by a BCBS policy and had to undergo an aorta repair. He said that in his state, he would no longer be able to purchase individual health insurance. State law somehow protects him as long as he remains self-employed.

McCain would need, besides offering the ability of individuals to buy health insurance with pre-tax dollars, to do something about pre-existing conditions that private health companies view as anti-selection. I don’t know that Obama has done too much about this yet. Hillary Clinton had talked a lot about it.

Obama has suggested that McCain would cause employers to drop health coverage. But it is not clear that employees wouldn’t be better off if they could use pre-tax dollars (or purchase grants for the poor) and form groups on their own, as long as pre-existing conditions were handled. Employers that no longer offer health coverage could compete better with companies in other countries with single payer insurance.

Remember that employer-based health care developed during World War II in an environment of wage and price controls. Health insurance then was a way to increase compensation and attract workers.

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