Tying Health Insurance to Employment is Bad for Women (and Everyone)
Today, most Americans have employer-sponsored health insurance, or ESI (source) — that is, coverage paid for by their or their spouse’s or parent’s employer, likely with a deductible, co-pays, or other out-of-pocket expense. Though more people are going onto exchange plans or Medicaid, ESI will likely remain the majority for the time being.
This situation is bad for women. It’s bad for everyone, as we’ll see, but it’s especially bad for women.
Updated to add: This is in the best-case scenario
That is, these arguments are about how ESI is bad for able-bodied, neurotypical/high-functioning workers. The current system for disabled people is even worse. What if you can’t work full-time? Your options are either limited and expensive, or means-tested government assistance that essentially keeps you in poverty. We must address that problem, but it’s for another article.
Moreover, God forbid you should get a long-term illness. Exactly how long you could keep your job would depend on your and your employer’s short-term and long-term disability policy, what insurance you have, and a host of other factors, but it’s a real danger. COBRA (continuing on your employer-sponsored plan but paying for it yourself) is often prohibitively expensive. It’s not hard to find stories of people who lose their job because they’re battling, say, cancer, thus losing their insurance and having to choose between bankruptcy and medicine. Here’s one (a video, alas). That is yet another problem with ESI that needs to be addressed, but also outside the scope of this article.
And still, even in the best case, ESI is bad for women, which is bad for everyone.
ESI exacerbates the gender wage gap
Yes, there really is a gender wage gap, even after you account for confounding variables (and that doesn’t include society’s curious undervaluing of unpaid and/or care work that’s more likely to be done by women, such as parenting, teaching and nursing). ESI reduces incentive to switch jobs, which is one of the best ways to increase your earnings. Thus any disincentive to switch jobs is contributing to the gender wage gap.
ESI contributes to the “off-ramp” (women leaving the workforce younger than men)
Most companies that offer ESI do so only for full-time employees. That makes it harder for women, who have to come back to work after having a baby sooner than they might want to, because they can’t risk losing their health insurance — especially when their child might depend on them for it.
In case you’ve never had a newborn, it is hard, disgusting, demoralizing work (that can also be sublime). I would be delighted to give you an earful about that, but Anne Lamott has already done it better. After having a baby, many mothers would benefit from the flexibility of part-time work, not to mention the kind of maternity leave most American women can only dream about (but parents in the rest of the developed world take for granted).
Many women simply quit rather than be forced to go back full-time before they’re ready. (To wit: when Google offered longer paid maternity leave, retention rates increased.) The “off-ramping” not only reduces mothers’ future employability (which further contributes to the wage gap) but leaves them with more of the undervalued, unpaid work (child-rearing). And if you still think women should just make different choices (spoiler alert: they can’t), then at least have some appreciation for the lost tax revenue on that lost income.
ESI contributes to gender inequality in relationships and society
You’d think that two people each working 25 hours a week would be better off than one person working 40, but the high cost of insurance negates the increased pay (assuming an equivalent hourly rate for both workers, of course), thus creating incentive for a “breadwinner” role in a couple.
Statistically, a woman is more likely to step back from her career than a man, even if her partner would be willing to split the load. The reason it’s usually the mom has a variety of causes, all of which are socio-cultural, not biological (though birth moms often find it easier to care for the baby for a time without going to work, but see: lack of maternity leave). For a deep dive into those causes, I encourage everyone to read Darcy Lockman’s All the Rage.
Each couple makes a rational economic decision, but the aggregate result then perpetuates many myths about women in society and the workforce, such as women being less suited for paid work or more inclined to do the child-rearing.
Nobody wins
Even though men seem to have the advantage in this scenario — they get to go to work while women feel like they have to stay home — for any given person, the “get to” and the “have to” can be reversed. That’s why the patriarchy, while it is set up to prioritize men, doesn’t really benefit them. Men should have the option to take parental leave, to work part-time, to switch jobs without worrying about health insurance for themselves and their families — just as women should.
Updated to add: ESI harms nonprofits and small businesses, too
Smaller businesses and non-profit organizations frequently can’t afford to offer health insurance to their employees, or if they do, not as good as what big corporations can. That means people have to think twice about working for a small business/nonprofit, even if it’s a job they would love or a cause about which they’re passionate. In turn, entrepreneurs think twice about starting those businesses, or activists those charities, because they know they’ll have trouble attracting better talent. Who knows what new ideas we’re missing out on because of the cost of health insurance?
It doesn’t have to be this way
It’s basically an accident that employers offer health insurance. We introduced wage controls during WWII (which I am embarrassed to admit was a surprise to me!), which led businesses to offer different benefits to entice workers. Since then, it’s become the norm, but we can change that.
The Affordable Care Act (“Obamacare”) increased coverage and reduced personal bankruptcy (of which medical costs was the most common cause). Now that the national- and state-run health insurance exchanges are up and running, there’s no reason we can’t divorce employment and health insurance for good. It would be a long road, but it won’t happen at all unless we acknowledge that we’d be better off on that path.
