Loren Clark-Moe, a former analyst at the Department of Homeland Security, complained recently in a Washington Post op-ed that her former employer’s health insurance didn’t cover a $480.00 abortion she had while employed there, because the Federal Employees Health Benefits Program is legally barred by Congress from covering abortions except in the case of rape or incest.
Citing “increasing attempts across the United States to limit women’s access to reproductive health care,” including the U.S. Supreme Court’s Hobby Lobby ruling, Clark-Moe railed against “special laws that restricted my reproductive choices.”
But exactly how are women’s reproductive choices restricted if their employers, whether government or private, don’t cover abortions? Their choices—i.e., their reproductive rights—are not restricted, of course. There is no right to “choose” to make others pay for one’s reproductive choices. An employee is free to pay out-of-pocket for uncovered procedures, as Clark-Moe did with her abortion.
Having said that, Clark-Moe is right that laws restrict her choices, but not in the sense she means. The question to ask is: How in the world did employers come to have so much control over employees’ health insurance to begin with? The answer is simple; government interference into the health insurance market, without which the whole issue surrounding the Hobby Lobby case would be moot.
The government interferes in health insurance in numerous ways. Employer-based, or third-party-payer, health insurance is one consequence of this interference that directly impacts the issue Clark-Moe raises. Decades ago, the government tied health insurance to employment through discriminatory tax policies that favor employer-provided over individually owned insurance, in effect giving employers inordinate control over employees’ health insurance—and restricting women’s reproductive financing choices.
So ingrained is third-party-payer that most Americans take it as axiomatic that someone else must provide health insurance. We then ressent and complain when something we expect not to have to pay for isn’t covered. So, like Clark-Moe, we target our resentment at the employer. But, rather than direct her ire at employers, her beef should be with the government.
Actually, the government restricts our health insurance choices in two major ways; employer-based health insurance, also known as third-party-payer, and benefit mandates.
Eliminating the tax discrimination favoring employer-based insurance by extending equal tax treatment to individuals would incentivize employers to establish tax-free individual employee health savings accounts (HSAs), funded by money the employer now spends on company health coverage—an incentive most employers would probably welcome. (Remember that employer health insurance is part of the employee’s compensation, which makes the money the employer spends the employee’s. HSAs simply gives employees control over their own money.)
Through HSAs, our ability to own and control our own health insurance could be restored. A similar phenomenon occurred when Congress expanded individuals’ pre-tax retirement options like Individual Retirement accounts (IRAs) and 401ks. Employers began phasing out defined-benefit pensions controlled by employers, and began contributions to the individual accounts owned and controlled (to the extent the law allows) by employees.
Absent discriminatory tax policies, Clark-Moe and Hobby Lobby’s employees would own their health insurance, as they do their life, homeowners, and auto insurance, and be free to purchase abortifacient coverage without worrying about Supreme Court rulings or Congressional political maneuverings. (Of course, an employer may still choose to offer company group plans. But such plans would likely go the way of the defined-benefit pension. What employer really wants to have the responsibility of managing employees’ health insurance.) HSAs would also solve a serious, related third-party-payer problem—pre-existing conditions.
Third-party-payer is not the only problem with health insurance; e.g., benefit mandates force us to buy coverage we may not need, want, or can afford, and drive up insurance premiums. This, too, restricts our health insurance choices. (For an in-depth examination of the problems caused by government interference in the health insurance market, and some moral, rights-respecting, free-market solutions, see Paul Hsieh’s call to Legalize Real Health Insurance in Forbes.)
Employers that provide health insurance have a right to decide what health expenses to cover. But, rather than violate employers’ rights, we should demand that government stop restricting our individual health insurance choices. We should demand that legislators enact whatever tax law and other legal changes are required to eliminate government-instigated third-party-payer insurance, eliminate all insurance mandates, and put healthcare consumers in charge of their own insurance. These simple reforms would protect employer and employee rights alike, start America on the road to free market health insurance, and make Hobby Lobby-like conflicts between employers and employees wholly unnecessary.
Moral Health Care vs. “Universal Health Care”—Paul Hsieh