The Fog Is Getting Thicker…

Over at Cato Unbound, Harold Meyerson argues that as employer-provided health benefits erode,

[c]ompanies that persist in offering such benefits are placed at a disadvantage when their competitors don’t. And consumers clearly can’t afford those benefits, either. As some recent surveys have made clear, precious few Americans can afford to buy medical insurance on their own or to utilize the Health Savings Accounts that the president is peddling.

Taking Meyerson’s points in reverse order:

  1. His comment that HSAs are unaffordable makes no sense.  Does he mean premiums?  HSAs are required to be coupled with high-deductible insurance, which has lower premiums than other types of insurance.  So the insurance component of HSAs is more affordable than … well, anything else.  Does he mean out-of-pocket expenses?  Sherry Glied and Dahlia Remler report that “the groupresponsible for half of all medical spending would see no changeor a decline in cost sharing at the margin and on average” with HSAs.  That is, the people who need the most medical care would have less financial exposure with HSAs.  Soooo, Meyerson should like HSAs, right?
  2. Meyerson plays blame-the-victim with the individual health insurance market.  Meyerson writes that “precious few Americans can afford to buy medical insurance on their own,” as opposed to having their employer purchase coverage for them.  Let’s set aside that workers pay for the cost of those benefits through reduced wages.  The feds and state officials have wrecked the individual market by (A) diverting consumers to employer-sponsored insurance and Medicaid, and (B) driving customers out with costly regulations.  If Meyerson and I set up fruit stands on opposite sides of the street, and the government whacks people with a 2x4 whenever they tried to cross to Meyerson’s side, would he attribute his lack of business to, say, market failure?
  3. Meyerson fails to consider that the market may be sending him a message.  He complains that consumers cannot afford to purchase for themselves the benefits that employers had been purchasing for them.  Again setting aside that workers were paying for those benefits all along, might that mean that traditional employer-provided health benefits were unsustainable?  Perhaps that they were contributing to rising health care prices & premiums?