Here's a statement that you will probably consider uncontroversial:
"The less that people have to pay out of their own pockets to have health coverage, the more people will have health coverage."
And yet there are people who will argue with you on this, despite its pleasing symmetry with everything you learned in Economics 101.
Thankfully, the Department of Labor's Bureau of Labor Statistics has come to the rescue with some actual hard data. Their Employee Benefits Survey is an ongoing research project that tracks the access to key benefits -- retirement plans, health insurance, life insurance, and so forth -- that employees have across the private sector. Last Wednesday, they released their 2007 report, which provides a snapshot of private-sector benefits taken in March of this year. (Here's a link to the complete report, if you're into that sort of thing. Warning: PDF format.)
Let's take a look at the benefit that's uppermost in everybody's minds these days -- health insurance coverage. Just about everybody will acknowledge that there is a crisis in health coverage in America these days. But dig into the numbers, and you find something striking: the crisis is much worse for non-union workers than it is for union workers.
First, let's look at the situation of the non-union worker. That situation is pretty depressing. First, only 69% of non-union workers have access to healthcare coverage at all -- and of those, only 71% choose to participate in their healthcare plan.
Why don't they participate? Because they have to pay too much out of their own pockets to do so. A full 81% of non-union workers who have access to medical care have to make an "employee contribution" to participate in their plans. On average, these workers pay $84 per month for health coverage. That comes out to just over $1,000 every year.
Now let's look at the situation of their union counterparts. 88% of union workers have access to health coverage, compared to 69% of non-union. Even more strikingly, 88% of union workers who can participate in a plan do, compared to just 71% of non-union workers.
Why the disparity? Because it costs union workers less money out of their own pockets to get coverage. Where only 19% of non-union workers have their complete monthly premium covered by their employer, a full 50% of unionized workers do -- that's 50% of unionized workers who pay nothing out-of-pocket every month for coverage. And for the other 50% who do have to make a contribution, their average contribution is much lower: $62 per month, rather than $84. That's $744 per year -- or, in other words, union workers who pay anything at all pay a full one-quarter less than their non-union counterparts down the street.
That's the story that is hiding inside BLS's data -- that by joining together, working men and women can make a better deal on health coverage with their employer than they can negotiating alone.
Comments (5)
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Very interesting. Do I have the math right?
49% of non-union workers participate in health care coverage.
75% if union workers participate in health care.
Posted by Stuart Elliott on August 27, 2007 at 10:15 PM
Posted on August 27, 2007 at 10:15 PM
If BLS's numbers are correct, then yeah, that's right (or close, anyway).
Non-union workers: 69% have access to health care, 71% of those choose to participate -- 69% x 71% = 49% who have coverage.
Union workers: 88% have access to health care, 88% of those choose to participate -- 88% x 88% = 78% who have coverage.
The relevant data can be found in the BLS report in Table 5, if you're interested.
Posted by Jason Lefkowitz on August 28, 2007 at 9:24 AM
Posted on August 28, 2007 at 9:24 AM
If the employers shift more of the cost to the worker, then the worker is less likely to get the insurance. This saves the employer money, because they then don't have to pay their share. So, employers are motivated to discourage workers from purchasing insurance. Then, when there's a major health problem, the insurance premiums won't go up as much, and the worker may quit, to get on Medicaid, rather than stay on with an illness and enough income to be disqualified.
The entire system is tilted to push people into socialized safety net. Why not just socialize the entire system and avoid all these negative events (like poverty and permanent disability) that eventually lead to getting basic socialized care?
Posted by jk on August 29, 2007 at 2:02 PM
Posted on August 29, 2007 at 2:02 PM
I'm certain that one reason Union members pay less towards the cost of their coverage, is that many Union plans are self-funded.
We're not making obscene salaries like Insurance Company executives. We try to administer the plans as efficiently as possible, so more dollars are available to the members as benefits.
A better deal for the member and the employer
Posted by John Covello on September 19, 2007 at 2:35 PM
Posted on September 19, 2007 at 2:35 PM
How would I go about finding out which of the big International unions carry their own health insurance plans? Does anybody have those facts?
Posted by CG on October 1, 2007 at 4:02 PM
Posted on October 1, 2007 at 4:02 PM