Government guaranteed universal coverage would be good for the
economy! America’s entrepreneurs and small business owners and
employees would be among the primary beneficiaries of single payer
healthcare. Our inefficient healthcare system puts small business at
a competitive disadvantage. As a result, by every measure of
small-business employment, the United States has among the world’s
smallest small-business sectors.
The last thing an entrepreneur or small business owner wants to do is figure out how to deal with health insurance. Which employees will be offered coverage? What plan is the best fit? What about the employees who cannot be covered for cost reasons? Not covering employees risks high turnover, and the associated costs of finding new employees and training them, not to mention the fact that people without insurance often have untreated medical problems, leading to less happy employees and lower productivity.
Covering employees with a reasonable plan costs upwards of $10k per employee per year (the employees must contribute an additional $4k/yr), putting small businesses at huge competitive disadvantage compared to large businesses, which have access to less expensive group plans.
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A national health insurance system that covers all Americans makes these problems disappear at the stroke of a pen. No longer will healthcare worries prevent entrepreneurs from pursuing their dreams or will employees be forced to leave a job they love just to have access to healthcare. No more high turnover and endless retraining simply because you can’t afford health insurance for your employees. And even though it will cover the tens of millions of Americans who currently don’t have health insurance, it will save money.
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Employer contributions to health insurance currently average $10,446 per employee and cover 71% of a household’s premium. These employer premiums are equivalent to a 12·29% tax on payroll exceeding the first $2 million (table; appendix p 6), extrapolated from Sanders and colleagues. Therefore, any payroll tax less than 12·29%, our upper bound in the SHIFT interface, would result in savings for employers.
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The Americans with Disabilities Act does not protect employees whose medical needs impose an “undue hardship” to their employer. For example, 19% of women diagnosed with breast cancer become unemployed within 4 months after treatment
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According to this article, the overall annual savings to the nation’s health care bill would exceed 13% or $450B. The sources of savings include the following:
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Reduced fees for hospital and clinical services by applying the existing Medicare fee schedule uniformly. For providers, lower fees per service would be offset by reduced billing and administrative tasks, which cost them $768B/yr.
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A unified system for billing and administration. Such costs are currently over 12% of spending for health insurance companies, compared to 2.2% for Medicare. A unified system would decrease billing fraud, since fraudsters exploit the complex structure of our multi-company insurance system.
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Pharmaceutical price negotiation. It is currently illegal for Medicare to negotiate prices for medicines, despite its massive buying power.
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Increased preventive care, which reduces “sick” care caused by treatment delays due to lack of coverage.
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Sources:
Bivens, J. (2020) Fundamental health reform like ‘Medicare for All’ would help the labor market. Economic Policy Institute
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Bruenig, M. (2020) CBO: Medicare for all reduces health spending. People's Policy Project
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Pollin R., Heintz J., Arno P., Wicks-Lim J., Ash M. (2018) Economic analysis of medicare for all. Political Economy Research Institute
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Schmitt, J., Lane, N. (2009) An international comparison of small business employment. Center for Policy and Economic Research
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