Dismantling Employer-Based Healthcare

It’s not often that events in the auto industry have a major long-term impact on the arts community. However it’s worth taking note of the groundbreaking new contract that GM just signed with the UAW. As this morning’s Wall Street Journal reports:

The labor agreement reached by General Motors Corp. is the most striking example of a bigger trend sweeping U.S. health-care: employers renouncing their decades-old role as chief health-care buyer.

Let us all hope this trend continues and expands! Perhaps more than any other industry in America, workers in the arts are poorly served by an employment-based healthcare system. For the most part, artists are either self-employed, or they enjoy erratic and episodic employment, or they take “day jobs” like waiting tables or temping that rarely provide benefits. Relying on a paternalistic employer to procure and pay for one’s healthcare is simply a lousy model for us.

GM’s move (which actually leaves both GM and the union in much stronger positions) is being seen as big domino falling, with other companies and other industries likely to follow suit. So if we, as a society, abandon the notion that people ought to get health insurance from their employers, what are our other options? Well, there are three:

1. individuals go direct to insurance companies;
2. the government (state or federal) picks up the tab for everyone;
3. individuals form large, stable groups through non-employer intermediaries who negotiate and purchase coverage on their behalf.

In my view, any of these is preferable to the status quo, though I believe the third option is a nice middle ground that preserves market forces but doesn’t leave individuals alone to wrestle with opaque, cruel bureaucracies.