Why the U.S. Needs to Disconnect Health Insurance From Employers

In 2018, my 49-year-old husband, Mike, was diagnosed with ankylosing spondylitis: a degenerative, progressive and incurable disease. Over the course of three years, he had over 50 doctor appointments and two hospitalizations; he also had to leave his career of 30 years in the hospitality industry.

I've spent my career conducting research on issues impacting workers' economic security, studying everything from discrimination to retirement inequities, and writing books on them.

But until my husband's medical problems, I wasn't prepared for the systemic dysfunctions and injustices of America's health care system.

This journey — as both a patient's wife and sociologist — has opened my eyes to how our health insurance system too often fails those who are working but sick.

Mike and I are among the "fortunate" group of Generation X members dealing with a chronic disease. We have relatively good health insurance provided through my university. We have access to top doctors and medical facilities in New York City. I have some flexibility as a university professor to help us navigate the many medical appointments and caregiving. And we had some savings to buffer the significant out-of-pocket costs — which are in the thousands.

Despite these privileges, the past years have been overwhelming for us.

Mike's disease made it impossible for him to continue working. We had to learn how to navigate the complex Social Security disability system to apply for disability insurance and Medicare, a process that took us years.

During this time, without access to my health insurance, he would have needed to either purchase health insurance on the market (something that can quickly deplete your savings) or go without. With his prescriptions totaling over $5,000 monthly, insurance is a must.  

Many of us with private insurance are grateful for our insurance — as long as we have it. There's always the worry, however, that we could lose it. Businesses downsize, spouses who carry insurance can die and workers get sick.

This relationship between work and health insurance may seem natural at this point, but it is a direct result of decades of federal policy.

The growth of employer-sponsored health insurance can be traced directly to World War II, when the Stabilization Act of 1942 was passed. It federally froze workers' wages to address inflation concerns and in response, employers used health insurance as a recruitment tool to fill labor shortages.

Today, health care costs have grown faster than wages, making it difficult for employers and workers to sustain the current system.

The reality is that our employment and health care systems fall short for workers who, in their prime working years, are struck with an illness.

Even those who do have health insurance find that the coverage may not be enough during a serious illness and the out-of-pocket costs can be exorbitant. Deductibles, copays and prescriptions can total into the tens of thousands. 

And navigating health insurance itself is challenging. After an episode of syncope (fainting or passing out), Mike was brought to a hospital where doctors were out-of-network with our health insurer. So, we then received hefty surprise medical bills from several providers that treated him.  

For over a year, we had continual correspondence with our insurance and medical billing companies to eliminate these bills, yet they continued to arrive in our mailbox (even though New Jersey, where we live, has a law that's supposed to prohibit them).

Many middle-aged Americans are just an illness or accident away from economic ruin.

Members of Generation X, in their 40s through mid-50s, are more financially insecure than boomers were at this life stage, in general. A 2020 University College, London study found that while Gen Xers are expected to live longer than their boomer counterparts, they face more years of ill health, with chronic conditions starting earlier in life.

It is not surprising then that 1 out of every 3 GoFundMe crowdfunding campaigns is to pay for medical costs of the uninsured and underinsured. There are over 250,000 such medical campaigns annually, raising $650 million.

As I see it, these days you have three choices if you have serious medical bills: work while sick to maintain your health insurance, go broke or hope for a viral social media campaign.

The greatest threat to your health is losing your health insurance and the pandemic has amplified this precariousness. An Urban Institute report estimated that 10 million Americans lost their health insurance as a result of the COVID-19 pandemic.

It's time, I think, to decouple access to health care from employment. By doing so, everyone could get the care they need, regardless of employment, marriage, a pandemic or any other factor. 

How? The United States could provide universal and expanded Medicare for All. 

There are many models globally that demonstrate the effectiveness of this type of health insurance — from countries with single-payer health insurance such as Canada and France to other nations with a mix of public options and private insurance.  

The results are clear: Compared to our international peer countries, our health insurance system consistently is more costly and has worse health outcomes for individuals.

Meantime, Americans face among the greatest levels of medical debt and bankruptcy due to health costs compared to citizens of other countries. We're ranked third in the world for medical bankruptcies, only behind China and India.  

And the progressive Economic Policy Institute found that Medicare for All would have positive impacts on our labor market, benefiting workers and employers.

On a positive note, there has been some progress on the health care front nationally.

The American Rescue Plan, signed into law by President Joe Biden, lowers health care costs by expanding Affordable Care Act subsidies and tax credits.

And Senate Democrats recently introduced a bill to lower the age for Medicare eligibility from 65 to 50 —which signals the importance of expanded access to health care. Lowering the Medicare age is certainly a step in the right direction, but if my experience has taught me anything, it is that we need to fully disconnect health care from work and only a Medicare-for-All plan will accomplish that.

Mike's diagnosis has made clear to me that a system based on employment-sponsored health insurance is quite shaky. Until we have true Medicare-for-All, it is conceivable that the dreaded diagnosis that may be coming your way is not that you're sick with a short time to live, but that you're too sick to work and not sick enough to die. 

Mary Gatta is an associate professor of sociology at the City University of New York and a member of the Scholars Strategy Network. Read More