We need to rethink employer-provided health insurance

In the era of the gig economy, our outdated health insurance system is too inflexible to meet the needs of millions of Americans. In short, our health care system is broken. Fortunately, there is a simple solution to this huge problem: We must expand association health plans. 

Nearly one in four Americans receive health insurance through the individual market, not from their employer. For one reason or another, we stubbornly adhere to a system that categorizes health insurance as an employee benefit when over the span of an individual’s working career, he or she typically holds more than 12 jobs. This alone shows why it makes little sense that our most vital lifeline, health care insurance, is provided by our constantly changing employer.

It is incredible to witness how dynamic our economy has become, especially when compared to just a few decades ago, when factories employed millions performing monotonous tasks on assembly lines. Currently, the U.S. economy is moving at warp speed to a flexible environment for employees based on tele-work, contract positions and a plethora of gig jobs. From ridesharing to selling and promoting online, the nature of the American workforce is vastly different than that of our parents and grandparents. If our health insurance market wants to keep pace, it needs to reflect these fundamental changes in the workplace. 

Since the passage of ObamaCare 10 years ago, states have experienced a mass exodus of insurers in the individual market due to rising costs. This has left millions with very few options in the individual market. Also, as a devastating result of this legislation, nearly 27 million Americans are left with no health insurance because they can’t afford it. Making matters even worse, since the passage of ObamaCare, premiums and deductibles have skyrocketed — despite assurances from President Obama that the opposite would take place.

In America, we can do better. We live in the most technologically advanced society in the history of the world, and yet we have millions who have very limited options for health insurance.

In every other industry, we have seen markets adapt to meet the ever-evolving needs of the consumer. From Starbucks to the iPhone, we have seen the private sector excel, while federal regulations have lagged behind, holding back innovation and limiting options for the consumer in the most crucial aspect of our lives: Health care insurance.

The goal of any market, and specifically health insurance, should be to provide consumers with as many options as possible, spanning the full spectrum of consumer needs and desires. 

In America, we have a variety of options in terms of grocery stores, clothing stores, car insurance and just about every other service imaginable. Why do we not have the same plethora of choices when it comes to our health insurance?

The first step is to abandon the employer-based model. It doesn’t make logical sense that a family must undergo health insurance changes 12 times on average throughout their lifetime just because they switch employers, does it? Of course not.

Good news: The expansion of association health plans is the easy answer to this problem.

Expanding association health plans would create a world where the YMCA, Costco and AAA, for example, could sell health insurance plans and negotiate for a better rate on your behalf. A large group of people who are members of a club, organization or wholesale store would have better luck negotiating with a large insurance company than a small business does, thus resulting in lower prices for all. 

This would provide multiple options at affordable prices for all Americans, even those with pre-existing conditions. As millions are currently filing for unemployment because of the public safety measures taken for COVID-19, it is crucial that we start questioning our hopelessly antiquated health insurance system. Does it really make sense that we continue to put our health care in the hands of our employer when layoffs, or job changes, mean that your health insurance plan must change too? 

The fact that a large percentage of the workforce is either uninsured or paying too much is an issue that isn’t going away. It is time to address the elephant in the room and expand quality coverage at affordable prices. 

Living in the most advanced society in the history of the world, it is vital that our health insurance system reflects our significant technological advancements.  Why in the world do we prevent our health insurance system from benefiting from the life-altering innovations that the American economy has unleashed in recent decades? 

The federal government needs to move quickly and tear away the red tape that is overwhelming our health care system. The federal government is the entity that linked employers to health insurance (as an incentive to employers during WWII price controls); therefore, it is the federal government that also must right this wrong. 

Christina Herrin is the director of Free to Choose Medicine, a project of The Heartland Institute, a non-partisan, free-market think tank headquartered in Arlington Heights, Ill.