Bioethics Forum Essay

A Lesson from the Contraception Coverage Uproar? Rethink Employer-Based Insurance

Unless you’ve been living under a rock for the past few weeks, you’re now well aware of the otherhealth care mandate. The Affordable Care Act requires insurers to cover “preventative health services” without charging a copayment, co-insurance, or a deductible, and the Obama administration has interpreted this requirement to include the full range of contraceptive methods approved by FDA, as well as sterilization procedures.

From the start, the interpretive rule had an exemption for certain religious employers, including churches. But it did not exempt the insurance provided to employees of Catholic hospitals, colleges, and charities. Supporters have applauded the administration as scoring a major victory for women’s health. But the Catholic Bishops and many Republicans don’t see it that way. For them, failure to adopt a broader exemption was nothing short of an attack on religious liberty.

Last Friday, President Obama “tweaked” the rule in a solution that seemed quite reasonable. Women will still get free contraceptives, while charities and hospitals with religious objections can avoid the complicity of having to provide the coverage, pay for it, or refer employees to it. And insurers won too. The onus will now be on them to reach out to the employees of objecting employers, but pills are a lot cheaper than pregnancies (not to mention more covered dependents). As with any good compromise, of course, no one is happy and the debate continues.

No doubt about it, conscience is a tricky issue, one I have tackled elsewhere. Ultimately, freedom of conscience is something we should strive to protect, and President Obama is normatively right, and not just politically expedient, to seek a resolution that will accommodate all parties. Whether or not you agree with the administration’s latest proposal, however, there’s a better solution, although one that’s admittedly much more than a “tweak.” We need to decouple health insurance from employment.

The current system is the result of a sort of historical accident that we just have not been able to shake, rather than some reasoned health policy judgment that insurance and employment ought to be linked. When wage and price controls were imposed during World War II, employers needed some new way to attract the best and brightest, so they turned to benefits such as offering housing subsidies and health insurance. At the same time, the IRS agreed to exclude the value of these benefits from taxable income, while counting it as a business expense for the employer, such that both employers and employees saw tax perks in this approach. When the wage and price controls were removed after the war, the IRS rule was not — and the insurance system stuck.

As a result, today we have a system where people (and their families) lose coverage when they change or lose jobs unless they are willing and able to pay high COBRA fees or purchase their own insurance. We have a system where workers’ wages have been depressed as employers shift funds to keep up with insurance premiums, which are rising to keep up with inflating health care costs. And we have a system where religious employers, be they charities and hospitals or businesses without any sort of religious mission, will sometimes fundamentally conflict with their employees over the scope of insurance coverage, necessitating a difficult balance between respecting conscience and preserving access to health care services that people want and often need. With problems like these, among several others, the employer-based health insurance system needs a much stronger justification than simple inertia.

Affordable health care is essential to human flourishing, and people ought to have access no matter who their employer is or even whether they work. Ultimately, health insurance should not be treated as a “benefit” – a term that suggests that it is somehow a bonus or an extra. It should be considered a right, provided to all by the government. Would there still be debates over coverage, for both financial and moral reasons? Absolutely, just as we see now in the context of Medicaid and Medicare. But the issues of complicity there are the same as for any tax-paying citizen whose contributions are used for government programs they may disagree with, from the death penalty to various military engagements. That is the price we pay for membership in a society.

The Affordable Care Act went as far as it could politically in reforming a broken system (perhaps even too far, according to some legal interpretations), and it made some critical improvements. However, cementing the employer in the health care relationship was a fundamental failure. Let’s make use of the controversy over contraceptive coverage to demonstrate one more reason why the status quo of employer-based health insurance just does not make sense.

Holly Fernandez Lynch is an Academic Fellow at Harvard Law School’s Petrie-Flom Center for Health Law Policy, Biotechnology and Bioethics.

Posted by Susan Gilbert at 02/17/2012 10:04:39 AM |

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