Insurance in America Today
In this episode, I want to break away from my normal topics to discuss the history of Insurance in America today, and how many continue to use employer-sponsored insurance coverage.
I have been working with the same company for over 25 years. I started out as a Radiology Technologist, moved over to Information Technology, and remained within the Corporate circles since. I had an idea this was rare today, due to employees bouncing from one opportunity to another. Yet, until I checked the numbers, did not realize how rare this was.
I was raised that there should be a form of loyalty between the employer and employee. A symbiotic relationship where each benefit from the other, but also purposely looks out for each other. With the change in culture, work environment and increase complexity, those ideals are not found so much anymore.
This is Matt Cole, with Info by Matt Cole podcast.
According to an Economic News Release in 2021 the average median of years that employees have worked with their current employer is 4.1 years. Additionally, workers between the ages of 25 to 34 remain only 2.8 years.
I understood it was rare, but didn’t realize just how rare. Typically the employer will provide time and resources for the employee to grow, learn, and become knowledgable with skills in order to do the assigned job. Considering the average younger worker leaves the company in less than 3 years, the employee reaps the benefit of experience, and the company is left to start over again.
How does the company retain the employee they provided this experience and opportunity? For that matter, why do certain employees stay, while others leave?
I know why I personally have stayed but pondered this over the weekend. This is what I have come to the conclusion about why people stay.
Reasons to stay are dependent on the company’s environment, co-workers, and overall employee needs.
Looking online the main four answers given are the following.
- Ability to grow and develop
- Pay and benefit provisions
- A realistic Work-Life Balance
- Given recognition and appreciation
You can also add the cheerleading aspect by believing in the company’s integrity, trust, mission, and vision. The employee is emotionally invested in the company. All of these are the positive reasons for remaining with the same company.
But for many, staying with a company may be based solely on a need or the best option in a given environment or availability. The employee may have members in the family requiring medical necessities and the company provides better insurance. The employee may be unable to move from their environment and must remain geographically. They are tied to the company, regardless of self, rather than need to support the family through necessary insurance support. I want to come back to this in a minute and provide some startling data.
The employee may have not been able to expand their skills and remain confined to only what job they know or understand. There is a fear to leave that which is understood and expected to move to an unknown. They wish to keep the known stability, rather than chance something worse.
The employee may feel confined through life scripts given to them at a young age. You may not have heard of the life script theory, let me explain.
A life script is a cognitive psychological term, where each individual has a schema or belief system created in childhood. Depending on the location, era, cultural upbringing, and/or parental upbringing the individual subconsciously makes decisions affecting their lives. These decisions can be done by the individual without realizing why.
Another way to look at this life script theory is a set of childhood decisions made unconsciously by a person in response to parental messages about self, others, and the world. While I agree on we as individuals are heavily influenced by our parent or guardian’s worldview, it goes beyond the adult influence. I would add the child’s upbringing with culture, geographical confinement, and social availability.
Life scripts tend to give individuals advantages or disadvantages once they are born. Comparing a given life script, you may have a child born in a healthy home versus one being traumatized. Each will be provided very different outcomes, without their own ability to choose.
There was an interesting read from the book “The Nature Assumption,” written by Judith Rich Harris contending peers, not parents influence the child more, having a larger impact on the child’s personality. The debate continues on life script, just as the debate of nurture versus nature remains contentious.
But let’s return to insurance.
The Cost of Insurance in America Today
Insurance in America is expensive, regardless of where you live. Investopedia comments that employer-sponsored plans average $622.50 a month, with individual employees paying $105 of that average.
Kaiser Family Foundation reported in 2020, the average cost of health insurance in the USA is $21, 342 for a family or $7470 for an individual. The employer will typically pay 1/3 the cost. Depending on your insurance provider, the premiums (cost to you) can run anywhere from $434 to $800 per month. This is average, without those having family members with special medical necessities.
The employee with family members having medical necessities can easily see an average of $17,000 each year per autistic child. I doubt this average includes the indirect costs associated.
The employee with family members having cancer risks significant financial hardships. Between 33 percent to 80 percent of cancer survivors exhaust their savings to finance medical expenses. This leaves most ( 1 in 3 by some estimates) having to turn to other family members and friends to help supplement the cost.
These increased costs on the family as a whole are not only financial strains but apply stress due to constant worry for the family member’s health and ability to provide.
The ability to properly support a family today is difficult with the increased food cost, gas prices increase, and taxes steadily on the rise. Add additional medical necessities and it becomes nearly unbearable.
This brings us back to why I personally stayed with the same company for over 25 years.
Yes, I enjoy my job as it does provide me with personal growth. But a larger reason has been the insurance. I had more than one family member with increased medical necessities. Early in my marriage, my wife had to have heart surgery. My son had gone through numerous medical issues since birth, including two bouts of brain cancer. Through this, the insurance has provided assistance. Yet, even having better insurance than most, it was still a struggle and we also fell prey to the 1 in 3 having to rely on assistance from family, friends, and the church.
I recall a story where someone had a conversation with the insurance company, discussing ICD codes being applied for speech therapy and other needs. An ICD code or International Classification of Disease code is a standard code given for reporting or groping conditions that influence health. These are standardized federal codes assigned. Depending on the code, the insurance company will pay x amount. Due to this speech therapist’s office not properly assigning the correct ICD, the parent had to intervene and assist. While this was not the parent’s job, it allowed the proper codes to be applied, having the insurance pay more than they would have.
This brings up the conversation involving free insurance. The reality is nothing is free, and the cost must come from somewhere. So if you can, stay with me as I take you down a quick trip involving America’s current insurance.
History of Insurance in America
After the Second World War, many European Countries adopted universal health care, providing free healthcare to their citizens. This was in large part due to the devastation left by the war’s quake, where many cities and landscapes were destroyed.
Since America’s cities were not destroyed during World War II, Americans did not lean toward universal health care. There were many good jobs coming into play, and the expectation for insurance fell upon the working American family. Franklin D. Roosevelt, the American President during this time, did play with the idea to nationalize healthcare as part of his overall Social Security plan soon after his 1932 inauguration. Due to the American Medical Association’s hard opposition, he feared if he tied the healthcare with social security he would lose both initiatives, so opted to keep the healthcare coverage out of it.
This allowed the genesis of private insurance companies such as Blue Cross and Blue Shield. Up to this point, there was no employer-based healthcare coverage. These privately-owned insurance companies were the primary means of healthcare coverage. Within the early 1940s, there was a growing real concern involving inflation for Americans.
The 1942 Stabilization Act was passed to combat inflation in America, which was designed to limit the employer’s freedom to keep raising wages.
With the inability to easily increase wages, the employer had to create new incentives to acquire employees. The incentive came in the form of employer-sponsored healthcare coverage. This allowed the employer to compete for scarce employees at this time. It was a loophole or workaround for the 1942 Stabilization Act since insurance coverage was technically not a wage increase.
During the 50s Unions bargained with the employers for better coverage and benefits packages. Vision care became available in 1957 and Dental in 1959. But this leads to another problem. What about those employees retiring from the workforce? At this point, they could not afford private insurance. Employer-sponsored healthcare has now been a cornerstone for the entire American healthcare system.
To compensate for this new issue, Lyndon Johnson, in 1956, created the Medicare and Medicaid systems. This was done to answer the issue of retirees’ healthcare, as well as to provide some form of insurance to those lower-wage earners, where employer-sponsored healthcare was not given.
This brings us to the 1960s and early ’70s. It looked like the single-payer plan (another name for universal coverage) would be adopted. The specific plan was debated between Senator Edward Kennedy and then-President Richard Nixon. But due to the Watergate Scandal, the plan was swept away. No free coverage for the American citizen.
Healthcare would reside primarily on the employer-sponsored shoulders to bear. Then in 2010, a new healthcare change was brought onto the U.S.A, called the Affordable Care Act. This federal requirement isn’t technically universal coverage for the American citizen. It primarily requires the American citizen to have insurance or pay a tax penalty. This Act ends at the end of 2022.
Here we are in 2022, still with limited options through private insurance companies, and employer-sponsored insurance companies, rating poorly on key health measurements which include life expectancy, preventable hospital admissions, suicides, and maternal mortality.
What’s crazy is according to a 2018 report, the federal government still spends $11 thousand on healthcare per individual, which is more than any other country. In 2019 employer-sponsored healthcare coverage still dominates, covering around 55% of the U.S. population.
The biggest factor behind the high cost of American healthcare resides in medical care costs, accounting for 90% of spending. The medical care costs consist of the professional services rendered by a Physician or other specified Provider during a visit. These include a combination of doctors’ services, inpatient and outpatient hospital care, prescription drug coverage, pregnancy and childbirth, mental health services, and more.
Those with family members have more medical necessities than the average…..there is no way they can burden this cost. No wonder, the employee having the insurance needed must stay with the employer. It is the primary option when this need must be met.
Even then, external structural support is required for the family.
Where Do We Go From Here?
So where do we go from here? How do we change the overall insurance landscape, allowing the employee to not be confined by the employer through medical necessities?
I don’t know. I wish I did. With the increased complexities involved, I personally do not see any way certain individuals can break away from their circumstances.
While the system may not improve, I do believe we can help those where the opportunity is given. Much like I and my family was provided assistance, when able, I could also provide assistance to others. Assistance does not always equate to finance, but can also be your time, experience in areas lacking for the other, or simply being a friend.
I think every American citizen currently knows someone, either within their own family unit or friend having a need for this external structural support. I would challenge you the listener, to reach out and help support those in need. This can be something as simple as providing an ear, or your time.
Why did I choose this topic?
If you are curious why I personally took the time and energy to make this episode, outside my normal topics, it’s because someone I was talking to, made a point for Universal Health Care coverage by a simple question. I had personally never heard this question before, and it was a really good point. The guy’s name is Drake and he pondered out loud, ‘If we had universal healthcare insurance, I wonder how many employees would leave their job?’
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In this Podcast Episode, I break away from my normal topics to discuss insurance in America today and how we got here.
Audio only version: Podcast Link
#podcast #learn #USA #Insurance #employersponsored #Roosevelt #unions #ww2 #infobymattcole
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