Jane Sarasohn-Kahn
Health Economist

Jane Sarasohn-Kahn

Jane Sarasohn-Kahn is a health economist and management consultant. She writes the blog Health Populi.

Expect Hidden Health Taxes

As a nation, we face a binary choice when it comes to covering uninsured Americans: we either want universal health insurance, or we do not.

If we choose to build upon the 50-year-old employer-based health insurance system - which both President Obama and most employers seem keen to do - then employers must play a central role in funding that system.

Employers and the insured already pay a hidden health tax to pay for health care for the uninsured. According to "Hidden Health Tax: Americans Pay a Premium", a study conducted by Families USA with actuarial calculations by Milliman, the average U.S. family and their employers paid an extra $1,017 in health care premiums in 2008 to compensate for the uninsured.

Milliman found that $42.7 billion, representing 37 percent of health care costs for uninsured Americans, were unpaid in 2008. Who was then hit by the "hidden tax" in the form of higher health premiums? That would be employers, who passed a growing portion of these costs onto insured employees.

By directly taxing employers to cover the uninsured, there's more transparency and light brought to a process that's currently hidden, arcane and inequitable.

If private sector employers don't want to pay to achieve universal health care, then a public option is a must-included provision for health reform.

If, at the end of the health reform day, Americans do not believe that there is a moral imperative to achieve universal health insurance coverage, then the uninsured will continue to access the health system the way they do today: in expensive emergency rooms, retail pharmacies at full cost for prescriptions, and doctors' offices when they are treating conditions that could have been prevented more simply and cheaply.

And insured people and employers who pay premiums will continue to pay more and more hidden taxes.

By Jane Sarasohn-Kahn  |  October 7, 2009; 9:36 AM ET  | Category:  Health Care Reform , Individual mandate Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
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