People Who Don’t Work Have Better Insurance Than People Who Work

Health insurance benefits through your employment is a curious American invention that makes little sense. What is the connection between work and health insurance, really? Our employers don’t pay our grocery bill, rent or mortgage, now, do they? And, ironically, even though many people think commercial insurance is a nice benefit for full time workers, that coverage is less comprehensive than Medicaid, our country’s insurance for the poor.

When I switched jobs recently, I got the standard offer of COBRA, continuing my previous employer’s insurance plan. It would cost me about $1,000 per month for a premium with an $8000 deductible. Assuming I bought the insurance and incurred significant medical expenses, I would then have to budget a personal payout of about $20,000 per year.

According to the Peter G Peterson foundation, "The United States has one of the highest costs of healthcare in the world. In 2022, U.S. healthcare spending reached $4.5 trillion, which averages to $13,493 per person. By comparison, the average cost of healthcare per person in other wealthy countries is less than half as much."

So, doing the math, my premium would cover the medical expenses for an average person (who may have to pay $1000 or more themselves every month for their family coverage). My premium alone would cover an American’s average medical expenses with 12.4% on top of that for the insurance company’s margin. My deductible would be a pure and indecent profit, because my premium has already covered the average American’s health expenditure

People who don’t work generally have Medicaid and I hear that in other parts of the country there are doctors who don’t take Medicaid. In Maine, a sizable portion of the population has Medicaid as their insurance and I always tell people it’s really like a gold card, just about universally accepted, the co-pays are symbolic and there aren’t really any deductibles to worry about. Compare this with a modestly paid employee who may have to pay $1000 or more every month to pay for their family coverage and could face $8000 of deductibles every single year for his family’s health expenses.