[yoloClin]

I'm from a country with public health care, so this comes as an interesting shock - would employees immediately lose health benefits if made redundant / fired etc?

Seems to incentivize getting rid of people when they need healthcare the most (eg "I have cancer" -> "Look, we're going to have to let you go, your performance the past few months hasn't been up to scratch"). I assume there'd be a bunch of health related after-effects to jobloss too, particularly around mental well-being.

[myblake]

So yeah people totally lose their health care when they lose their job. Typically it runs through the month and then you’re on your own. You can by law keep buying the same plan at full price (employers typically pay between 50-80 and sometimes up to 100% of the premium).

However, when you get sick that rate doesn’t go up, so there’s no incentive from your employers standpoint to fire you when sick. Because of the “losing coverage” part it’s still extra shitty when they double up (cancer plus being fired sounds pretty awful).

Obamacare notably created markets for folks not receiving health insurance through work to purchase it directly (in addition to subsidies for low to middle income folks to do so, and several regulatory changes around other parts of the system), but that basic system wasn’t fundamentally altered and has been more or less how the US has done things since world war 2.

Fun bonus fact, employer based insurance was first offered as a workaround for world war 2 era wage controls.

[kaonwarb]

Large employers typically self-insure, including a large majority of companies with over 500 employees [1]. You might see, say, Blue Cross on your card, but they’re just administering - the actual payments to doctors, etc. are in fact coming from your company. Sometimes the company will still show a percentage of “premium” that they are covering; it’s not a real premium in that case, just a percentage of the average care covered per employee.

This means there could be a strictly financial incentive to dismiss a sick employee. This is of course entirely illegal if that were the purpose. [1] https://www.shrm.org/resourcesandtools/hr-topics/benefits/pa...

[dodobirdlord]

> Fun bonus fact, employer based insurance was first offered as a workaround for world war 2 era wage controls.

Plus, its tax incentivized in three different ways.

- The employer can deduct it as a business expense, reducing corporate profits on which they have to pay income tax. In fairness, wages work the same way...

- ...but! The employer doesn't have to pay payroll tax on the amount it adds to their payroll.

- And while the employer puts it on the employee's W2, it doesn't contribute to their taxable income.

Dodging two kinds of income tax and payroll tax means that it works out to be way cheaper for a company to buy health insurance for their employees than it would be to raise their employees pay enough that they could buy the same insurance themselves, and that's before the company leverages its purchasing power to get good deals from insurance companies. It's an absurdly strongly incentivized system.

[sidlls]

Companies big enough that "buy health insurance for their employees" is a thing pay insurance companies to administer the plans and they pay the medical costs as well. When an employee of such a company files a claim, the company ultimately pays the cost. I'm skeptical increased payroll taxes are more than these companies' cost to provide insurance. Also, payroll taxes themselves are also deductible.

[dodobirdlord]

> I'm skeptical increased payroll taxes are more than these companies' cost to provide insurance.

Doesn't seem unlikely to me, once you have enough employees, average cost per employee ends up being about the population average, skewed heavily by the fact that the company isn't employing very many people past retirement age where so much of total medical expense lies. Profit margins for health insurance companies aren't very high, so after administrative costs, what the average person/company pays in healthcare insurance is about what the average person accrues to their insurance in healthcare costs.

> Also, payroll taxes themselves are also deductible.

Shifting compensation to untaxed benefits brings the savings from corp_tax_rate * payroll_tax_rate to payroll_tax_rate.

[evan_]

> there’s no incentive from your employers standpoint to fire you when sick

except that if you get a severe illness and can't come to work, they can fire you for that

[pkaye]

In California you can get 52 weeks of short term disability if you are not able to work due to illness.

[hcknwscommenter]

"However, when you get sick that rate doesn’t go up, so there’s no incentive from your employers standpoint to fire you when sick."

Sorry but that's just wrong. Most large employers and even many smaller shops "self-insure" meaning they are footing the bill. Your health insurance company is just a front/conduit/paper pusher. In those cases, it is your employer who is ultimately deciding your prescription is not in the formulary, your jaw surgery is cosmetic even though you suffer from chronic headaches, etc. It is also your employer who sees that employee number 438 is costing them >> 1M/yr in covered medical bills (cuz cancer). They have every incentive to suddenly realize you are not working out for entirely unrelated (and fake) reasons.

[GeorgeWBasic]

In that case, maybe self-insuring needs to be made completely illegal, given the horrible incentives it creates.

[DoreenMichele]

A. If you are a military retiree or military dependent (spouse or child), medical coverage is free and works differently from the rest of the system. This may be ten percent or more of the population, as a hand wavy wild guess. (If that sounds high, a foreign friend used to tell me Americans are rabidly militaristic nutcases with an insanely high percentage of people here who have spent time in the military.)

B. You can also be covered under your spouse's work plan. So losing your job doesn't necessarily cut you out completely.

C. A few years ago, we changed the law to make it possible to remain covered by your parents' healthcare up to age 26, even if you are married.

D. If you are old enough, there's Medicare. If you are poor enough, there's Medicaid.

If none of those situations apply, yup, it sucks big time. The high cost of COBRA makes that option an ugly joke for a lot of unemployed people who simply can't afford it.

The US should join the rest of the developed world and provide universal coverage.

Edit: For context, my father, ex husband, father-in-law and assorted other relatives were career military. I'm not anti military. I'm just trying to say "That's totes a good faith wild guess!"

[nsxwolf]

We have a law called COBRA that lets you continue your employers coverage for up to 18 months I think it is. You have to pay the entire premium including the portion your employer paid so the price tag is usually a shock.

[labster]

So on Friday you have good health coverage, and then you get a recorded message on Zoom from your now former job. Now you have to pay for COBRA but you only have enough money reserves for two months of housing/food. So you apply for MediCal. Nope, you have too much money. So the reasonable thing to do is to take no health insurance.

Then, you get the coronavirus. Pretty bad. You’re young, so you live through it, but those days on a ventilator weren’t cheap. But unfortunately for you, the ambulance driver took you to one of those hospitals that sues its patients for non-payment. You should have told them to take you to a different hospital as you were gasping for breath.

In any case, you now have a medical debt of $40000 for a week or two of ICU. You have to file for bankruptcy. Unfortunately you’re young, so you’re barely into the principal on the house. So that’s gone.

Luckily, you still have your car. At least you can get to interviews for the few jobs left in the recession. But it’s sure hard to show up looking clean without a shower. At least now, you’re eligible for public insurance.

[DoreenMichele]

Yes, US health policy leaves much to be desired. But a few points:

Up to eighty percent of people on ventilators die to Coronavirus die. (This percentage is so shockingly bad that some doctors are doing all they can to avoid or delay using them.)

Most who need ventilators for Coronavirus are older and have other health issues already.

As someone in a high risk category due to being medically handicapped, I will suggest that a lot of those people aren't hale and hardy enough to have a good job with good benefits. I've done freelance work for years.

Though, yes, it's true: In spite of the "all homeless are junkies and crazies" meme, serious health problems and their cost are a significant contributor to people ending up homeless in the US. Another major piece is our lack of appropriate housing options.

In addition to fixing healthcare, the US desperately needs to fix it's housing issues.

[bhupy]

> Now you have to pay for COBRA but you only have enough money reserves for two months of housing/food.

Upon passage of the CARES act, everyone that loses their job due to COVID is eligible for UI, and the federal UI is now $600/week, on top of the existing state UI. So in the state of California, an ex-Disney employee would receive $4200/month[1].

If you're single, $4200/month in California will more than pay for rent + health insurance + food.

If you're a working couple, together you will receive $8400/month.

[1] https://imgur.com/a/AifRmdD

[nsxwolf]

I would recommend to anyone to do what it takes to pay for the COBRA. You have 60 days from the last day of your coverage to elect it, and a grace period of 45 days after that to make a payment. If you manage to find another job with benefits before then, and don’t need to make any insurance claims, you can drop the whole thing and not pay.

[selimthegrim]

So Chapter 7 won’t let you keep the house if it isn’t paid off?

[jacobush]

If you lapse in payment in your inherited coverage from your previous workplace, and get a new plan, will they take a premium for any pre-existing conditions they deem you might have?

[vkou]

For the most part, insurers can't blackball you for pre-existing conditions under Obamacare.

[itronitron]

Monthly cost for a married couple with children can easily be over $2000 a month.

[taurath]

Think around $2000 a month for a family of 4 or $600 for an individual.

[ilaksh]

A very significant percentage of employment in the US is contract work. So people quite often need to purchase their own insurance to get a good plan. I couldn't really afford a good plan along with everything else so I just moved to Mexico.

[dang]

We detached this subthread from https://news.ycombinator.com/item?id=22819568.