The End of Employer-Provided Health Insurance, by Paul Zane Pilzer and Rick
Lindquist (Hardcover, 2014)|
(You can print this review in landscape mode, if you
want a hardcopy)
Reviewer: Mark Lamendola, author of over 6,000 articles.
Every employee, employer, and small business owner (even if not an employer)
should read this book. If you do not have a copy, you need to get one.
Here's what it's about. The authors make a clear and compelling case that an
employer-provided medical insurance plan is not good for anyone but the
insurance companies. The fact that this insurance harms employers and employees
has, actually, been the case for quite some time. The Unaffordable Care Act (UCA),
however, makes this faulty product an even worse deal. This book is a comprehensive guide for employers to offer an alternative
to an employer-provided medical insurance plan and it also helps individuals
understand how to get started on signing up for an individual insurance plan
under the UCA.
Personally, I found this book really cuts through the clutter and
confusion surrounding how to respond to the UCA. The authors make it clear what to do and why.
The book even motivated me to actually go online and (try to) find what my
insurance rates would be with the UCA subsidy. Unfortunately, the Website
doesn't work; after multiple attempts to get this information, I finally
gave up. Despite that, it is clear to me how to proceed if the UCA exchange
thing ever makes financial sense for me and the Website ever gets fixed so
it provides the information. Previously, I had no idea what to do to even
start the sign-up process (I hadn't made any effort to find out).
I don't want this review to get bogged down by addressing this book's
language issues early on, so that commentary comes after the main body of
the review. There is also a misconception about the UCA; I will go into
that after the main body of the review, also.
This book shows why employer-provided insurance is no bargain, rate-wise.
In fact, the rates are vastly inflated over what an individual would pay.
Most employees don't understand that their paycheck is only part of the
total cost their employer pays for their services. An employer can pay so
much for an employee to do a given job; the total is the burden rate and
it's much larger than the employee's wage. Total costs of paying for an
employee include all of the payroll taxes (among
other things). Add in a big wallop for the "employer paid" portion of
jacked-up insurance rates, and the employee must work for much less
take-home pay thanks to this "free" benefit paid by the employer.
There are other problems with employer-provided insurance, also. And they
have been around for a very long time. I remember one situation in which a
coworker was badly treated by our boss. He got all the sh** jobs, and often
toiled long after everyone else had gone home. Not only that, the company
never gave him a raise and the wage gap compared to his coworkers had grown
to be huge. I asked him why he put up with this, and he said he could not
afford to quit because he needed the medical insurance to cover his
terminally ill wife.
If only he'd had private insurance, but no company calling itself an
insurance company would give them a policy. One of the few good things about
the UCA is it ended the "pre-existing condition" excuse for insurers to play
the insurance game selectively.
Yes, I realize we all pay higher rates if people with illness are
covered. But I see that as a cost of participating in a system that is
supposed to spread risk and cost. This selective insurance gaming should
never have been permitted under law, and it's immoral in the extreme. You
are either an insurer or you are not; picking and choosing makes you a
predator rather than an insurer.
The authors pointed out that with
employer-provided insurance, the insurance companies insure all employees
regardless of "pre-existing conditions" so this seems to solve the predator
problem. But one catch is the employer's rate (and thus the rate to the
employees) is affected negatively by factors such as how much is paid out in
claims. Another catch is many people can not afford to change jobs. Those
who lose their jobs find it harder to find work and, prior to the UCA, impossible to find an
individual insurance plan.
The authors (correctly) tell us that employer-provided medical insurance
emerged as a consequence of the 1040 tax system. That alone should set off
alarm bells about such insurance. Any time there's a 1040 angle, there's a
door for the criminals at the Institute of Reprobates and Sociopaths to
conduct crimes for their personal enrichment and/or engage in other abuses.
Did you know that the federal governments own auditor (the GAO) found
that employees of this agency spend half their office time on p*rn and
gambling sites rather than (mis)administering the 1040 Tax Code? Toss in the
fact that they find time to engage in the Hoyt Fiasco, the Amcor Atrocity,
and other famous scams, and you can see that the vast majority of Institute
employees are not necessary. Massive layoffs there would be a very good
thing. But it doesn't happen and now these reprobates will have unfettered
access to your personal medical information thanks to the UCA. It will be
interesting to see what mischief they can get by with, there.
Back to the employer-provided insurance. It was a way for employers to provide
"tax-free" (free of 1040 tax, anyhow, but still ultimately subject to a
myriad of taxes) compensation
to employees in the form of medical insurance benefits. At first, it was
basic insurance. But to make it an increasingly valuable benefit, more and
more things were larded into it. Costs, naturally, skyrocketed. The obvious
solution would be to end the 1040 tax system; this system produces a net
loss in revenue for the federal government, and it should have been ended
decades ago. Creating the UCA to address this 1040-created medical insurance
cost problem is like using boiling water to clean a baby. It's just not a
But it is the solution we are stuck with, at least for now.
After reading this book, I'm not
sure why any employer would continue with employer-provided medical
insurance. The authors make a clear and compelling case that it's much
better to go another route. And what is that route? A defined contribution program.
Note of disclosure, here. The authors are in the business of working with
companies to create such programs for their employees. Specifically, that
business is Zane Benefits. So there is probably some bias in the viewpoints
of the authors, but I really cannot detect that in this book. I think they
gave this a fair treatment. I also think their work is the perfect background,
because they are subject matter experts. Because they are SMEs and work with
people in this space, they are highly qualified to provide an easy to
understand, step by step guide to implementation. And this is exactly what
they have produced.
This book has some minor flaws (see below), but overall it is a "must
read". While many people hold out hope that the Republocrats will repeal the
UCA, I have learned not to expect anything from those people. The Ds and Rs
differ about as much as the Crips and the Bloods or the Genovese Family
versus the Gambino Family, and are in the same line of work (organized
crime) except for much more money than their private sector counterparts.
That means we need to know how to play the cards we're dealt in this rigged
game. This book provides valuable guidance on how to play those cards.
This book consists of three Parts:
- Part I. Lays the groundwork for Parts I and II. Really good info
here, don't skip over it.
- Part II. Guides the consumer on how to navigate the new medical
- Part III. Guides the employer on transitioning to a defined plan
The Executive Summary is most enlightening. I can tell quite a bit of
thought went into those 4.2 pages to crystallize key concepts and give the
reader a good understanding from which to proceed with the rest of the book.
Reading it again after reading the book is also helpful. I have a similar
impression of the Introduction (3.2 pages). The body of the book runs 197.2
pages. There are two useful Appendices; A is for the consumer and B is for
the employer. Readers might be taken aback at how sparse the References
section is, but remember that the authors are subject matter experts. Not
much academic research is really needed. If you read, say, "How to Drive a
Car," by Mario Andretti, would you expect a large reference section? I think
Language is important and it affects how we think; this concept has been
illustrated nicely by Bradbury and Orwell. For the purposes of this book, the
reader can understand what's being said despite the language issues. I don't
see any deliberate obfuscation. So no need to mention
these gaffes at the outset, but it is important to mention them.
Has anyone ever seen a health insurance policy? Personally, I have not.
What do you do, file a claim if you forget to pick up broccoli to go along
with your kale and bok choy when you go shopping? Do you file a claim if
your body fat percentage climbs to 8%? Just to be clear, health care
consists of the lifestyle choices you make to take care of your health. Less
than 10% of Americans make lifestyle choices conducive to health; you can
verify this by simply observing what people put in their shopping carts at
the grocery store. Very little in the way of fruits and vegetables
(produce), but lots of products containing neurotoxin-contaminated corn
syrup, excitotoxins, and carcinogens.
People make profoundly bad choices, because we have a
disease lifestyle culture. Even our language includes such health lifestyle
terms as "health nut" when clearly it is the disease choosers are are the
Because the popular lexicon misuses "health" in "health care", I think
primarily due to the language abuse foisted by the medical insurance
companies, when "health care" is used in a discussion of "medical care" we
generally assume the speaker/writer means the latter and not the former. The
goal of this book was not to provide English lessons, but to help
individuals and employers deal with the disaster known as the Unaffordable
Care Act (aka, Obummercare).
Another language problem in this book is the grammar. The misplaced
modifiers cause the reader to have to stop and interpret the intended
meaning, which is quite different from what the authors actually said. The
constant misuse of "who" as an object also makes for mental pauses. I hope a
future edition will have good copyediting that corrects these problems.
The major misconception with the Unaffordable Care Act is embodied in its
language-abuse name. It's a tradition in CONgress to name federal programs
such that the name states the opposite of the real world effects of the
program. The "Affordable" in the name of this Act takes that to a whole new
For the typical citizen/victim of this illegal scam (the Supreme Court's
ruling definitively showed it was illegal, but the decision delivered by the
Court did not follow from that ruling and actually contradicted it), it's a
financial negative. A good analogy is, "That's a red, eight-sided sign with
the the following letters in white: S, T, O, and P. But it's not a stop
sign, it means Go." Truly crazy, but it's the reality. Intimidating or
buying nine people into producing something like this is not all that
Pleas note that I'm not panning medical care reform (this wasn't
reform). We badly need such a thing. I am just panning just this particular scam.
On the surface the UCA does make medical insurance more affordable, and for
many individuals it actually does. But when you do all the math, you
find that a $1200 annual subsidy does not make up for a $10,000 annual wage
loss. Ask the millions of people who lost their full-time jobs how that's
working out for them now that they set their winter thermostats to 55
degrees and still can't make ends meet.
The UCA, even with its subsidies, forces many formerly
insured individuals to drop their medical insurance and pay the IRS fine.
After paying for food and shelter and other basic living expenses, there is
only so much money left. Shelling out $200 or $300 a month for insurance
just is not an option because the money just is not there. And with a $6,000
deductible, the insurance does not protect the insured from financial
Another issue is the fact that the Institute of Reprobates and Sociopaths
is involved. Any prudent taxpayer has a separate checking account just for
paying the 1040 taxes; this way, if some Institute employee launches a
baseless attack (they are known for shooting first and ascertaining actual
tax liability later, if at all), only the small amount in that checking acct
is at risk. The Institute has to get a court order for access to other
accounts, unless the taxpayer is foolish enough to volunteer that info. But
now with the UCA, these criminals have access to an entirely new class of
information that formerly they didn't have automatic access to. You will
need a separate checking account just to pay your monthly UCA payments and
that's a lot of cash withdrawals and deposits every month. It remains to be
seen how manageable this is. This one factor alone prevents me from going
the UCA route.
Regardless of its obvious illegality (on multiple fronts), the UCA is now
something we must deal with. We can learn how to accept the crumbs that it
offers in place of the loaf it takes away, and at least get something back.
This book can really help.