Employment-Based Health Insurance and Universal Coverage: Four Things People Know That Aren't So

Abstract:     
Employment-based health insurance is the Rodney Dangerfield of U.S. health policy: it gets no respect from anyone. Employment-based coverage ("EBC") may not get much respect, but it covers roughly 177 million people - and it appears to have considerable staying power - even if the principal explanation for that staying power is nothing more compelling than inertia. Given the likely prevalence of EBC for the foreseeable future, it is worth emphasizing four important points about EBC and universal coverage. What these points have in common is that they are myths - most people believe they are true, even though they are not. The four "myths" are these:

* Employers pay for EBC;
* There are 45.7 million uninsured Americans;
* Universal coverage means everyone will have access to high quality care;
* Universal coverage will solve the cost problems of American health care.

The paper explains why each of these points are "things people know that aren't so." It then highlights the budgetary and collective action problems with trying to get to universal coverage without relying on EBC, at least for the foreseeable future.

Keywords: Health Insurance, Employment Based Coverage, Uninsured universal

JEL Classifications: K23, K32, I11, I18

Working Paper Series