[usefulcat]

Imagine a scenario where overnight, all US companies stop offering health insurance. In this scenario, all those employees who used to have health care would now have to pay for it themselves (or do without it). So they're all going to be expecting an immediate raise to compensate for this increased expense, and if not they'll almost certainly be looking for a new job that pays a lot more (after all, it's not like they need their old job for the insurance any more..)

If you're a company, unless you were already planning to do some mass layoffs, you're going to give most of them that raise because the alternative is having a bunch of people quit. And if you don't increase your offers for new hires, you probably won't be hiring anyone either.

[paulmd]

> If you're a company, unless you were already planning to do some mass layoffs, you're going to give most of them that raise because the alternative is having a bunch of people quit. And if you don't increase your offers for new hires, you probably won't be hiring anyone either.

And yet price stickiness is a thing that exists!

https://www.investopedia.com/terms/p/price_stickiness.asp

This is the problem with a lot of "econ 101" stuff, it makes these big sweeping assumptions like "markets are price-efficient and operate at market-clearance prices" and after spending econ 101 building it all up, econ 102 and 200 and etc etc will spend semesters telling you why it's all crap.

Markets are not price-efficient, real-world prices are very sticky, and that includes the price of labor (actually labor tends to be far stickier than most other products). For example, vanishingly few real-world employers are going to offer automatic raises to cover cost-of-inflation, which is the same mechanism that you would be relying on to increase wages after removing health-care benefits.

A lot of people in retail/food are still making the same $11 or $12 they were hired on at, despite much higher salaries often being paid to new hires (guess the efficient market hypothesis says their on-the-job experience has... negative value?).

Tech is its own little thing, competition for tech labor is much much tighter, of course, but that much is obvious. In the real world, you can already see that labor prices are very very sticky and owners will almost never choose to pass these savings along.

[KerrAvon]

The catalyst for that scenario is likely some form of effective universal healthcare, which you will pay for indirectly via taxes.

[axlee]

It will have to be paid for, as is everything, but it will cost much less both in aggregate and at a personal level. Source: any other country.

[lostcolony]

It also, to the grandparent's point, would not really necessitate anyone spending anything differently. The amount employers pay to private healthcare plans instead becomes a corporate tax; the amount individuals pay to private healthcare plans instead becomes an individual tax. But just by dint of it all going to the same pool, which now covers everyone, gives such massive pricing power that all those "$64 for an aspirin" BS charges will be cut to be in line with, yeah, any other country.

[maccolgan]

Universal healthcare funded via taxes is the exact opposite of insurance. Insurance premiums are decided upon your medical profile and risk. Taxes are based upon income, which has nothing to do with health.

[lowercased]

Perhaps insurance companies would have to start competing for the business of individuals and families, and... perhaps that competition should drive down the price some, so they could get our business? (ha ha ha, of course, not going to happen).

[wankerrific]

Sure. Just like “competition” in broadband has driven prices down across America.

[butlerm]

The reason why that won't happen spontaneously is that the employer purchased health insurance subsidy amounts to something like $273 billion per year (as of 2019). Employees would have to pay a comparable amount in additional income taxes to purchase comparable health insurance for themselves.

[axlee]

> Employees would have to pay a comparable amount in additional income taxes to purchase comparable health insurance for themselves.

This is false: they would pay a lost less in additional income taxes. Americans overpay for the same services as every other developed country. They are being fleeced.

[throwaway2037]

Another idea: Cut military spending by $273 billion.