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Medicare-for-all would just about erase the huge medical health insurance business

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While doctors and hospitals would take a financial hit under Medicare-for-all, the outlook is even bleaker for the private health insurance industry, whose extensive workforce could be wiped out.

Health economists say that might not be such a bad thing, however.

Nearly 386,000 people were employed by health insurance carriers last year, according to federal labor data. The workforce is even larger if one counts jobs that exist because of health insurance, like administrators in doctor’s offices and hospitals who negotiate prices. Economists have projected as many as 2 million jobs could be lost under a Medicare-for-all system that eliminated all private coverage.

A single, generous public plan replacing private insurance from companies like UnitedHealth Group, Anthem and Cigna would undoubtedly amount to a massive reshaping of the country’s health-care system and a significant loss of jobs throughout the health-care sector. America’s Health Insurance Plans (AHIP), insurers’ powerful trade association, calculates the jobs of around 1.5 million workers in the industry would be jeopardized.

But defenders of Medicare-for-all argue — and economists agree, to some extent — that a reduction in health-care jobs is an upside, not a downside. Over the past few decades, the sprawling health-care complex has partly grown out of huge administrative burdens, as insurers and providers constantly haggle in a complex and wasteful payment system.

As a general rule, economies do tend adjust over the long run, and those who were laid off are able to find employment elsewhere. Such industry expansions and contractions are natural.

But that doesn’t mean the short-term job loss from Medicare-for-all would be inconsequential, warned Michael Chernew, a professor of health-care policy at Harvard University. Some people would be absorbed into other sectors, but there would also be real dislocations and transitions played out over many years, he said.

A prime example: the decline of manufacturing jobs in the United States, which led to higher levels of unemployment in formerly thriving Rust Belt cities such as Detroit and Cleveland.

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