I have argued earlier that competition among health plans is crucial for reforming the U.S. health care system. Only a real marketplace can make consumers cost conscious and promote innovations in economical delivery of medical care. A crucial part of creating a real marketplace in health care is for plan choice to be available at the individual level. Allowing for numerous choices in plans makes the demand for health care more “elastic” which means plans are more likely to slow their premium increases over time. It also accelerates innovation in reducing delivery costs and improving quality of care. Since the majority of non-Medicare individuals get their health care through employer sponsored plans the boss has enormous say over the available offerings.

And what is the trend on real plan choice at work? Five years ago 77% of insured workers had no choice in health plans under employer coverage. Unfortunately the latest survey data indicate that this figure has now increased to 88%. (http://www.kff.org/insurance/7527/upload/7527.pdf) We are going in the wrong direction when it comes to real competition in health care. I talk to the employer groups in Northeast Ohio about the issue of health insurance. I urge them to band together and create “marts” where their employees can choose from numerous offerings. I tell them that modern risk adjustment and plan software is available to assist them in running these “insurance exchanges”. And after politely listening to me I am informed that my intentions are good but I don’t understand that this problem is too big for them to solve. The only solution, I am told, is a government takeover of health care.

In one sense, though, they are correct. They can’t solve the health insurance problem. They are the problem. I have reluctantly reached the conclusion that the only way we will ever get a real marketplace in health care is to remove the power they have over us. This involves making all employer payments for health insurance taxable and providing a refundable tax credit unrelated to where the insurance is bought. I would imagine the threat of us going to find our own coverage will rapidly lead to a multitude of choices from the boss.