Rethinking health insurance

I’m all for Congress and the president taking a hard look at the health-care industry with an eye to reform. I agree with those who claim that the current system does not have practical long-term economic sustainability and that a country as rich as ours should not have 47 million of its citizens uninsured. It’s time for universal care, delivered at a consensus-driven level of high quality.

But there is one persistent perspective that insists on maintaining health insurance as an employer-based benefit. This proposal does not seem progressive in light of the career development changes that are underway in our society.

Boomers have fallen into the same trap that every generation does. In this case, the if-it-was-good-enough-for-me-then-it’s-good-enough-for-you snare. When there was very little workforce mobility, it made more sense to define employee groups as having the critical mass necessary to form insured groups. And they have worked well for many employees over the decades. What seems out of touch now is expecting that employee groups will be continuing to offer the same kind of population solidarity with a relatively stable collective of individuals.

Given current career trends it should be expected that there will be much more workforce mobility in that the career paths of individuals will be much more serpentine and much less linear.

In a way, the country that has placed such a high value on individualism has gotten its wish. We’re all turning into freelancers. The new career ethic is to look out for yourself. Workers are now free to ask about what an employer can do for them before they ask what they can do for the employer.

In a time such as ours – which increasingly encourages young and mid-career workers to build their own dreams and to seek their own destinies — it should not come as a surprise that loyalty to an organization will diminish. Although the aggregate employee numbers of companies may remain relatively consistent over time, the actual individuals that make up that base will be changing with more and more rapidity.

Is it practical, therefore, for employees to pin their health insurance to an employee group that they won’t be with for all that long?

Basing health insurance plans to groups remains an effective approach. Spreading incurred costs of individuals across a wide population pool has an advantage over an individually based fee-for-service system. However, from a benefits management perspective it seems that a system that must contend with an ever-changing membership base would be more difficult to maintain compared to a more stable group.

Perhaps efficient digital recordkeeping programs can be refined to manage the flow of the insured from group to group, but why bother? Can’t there be insured groups or exchanges formed in ways other than by employer? Not being an insurance expert, I know that I’m stepping into murky water here, but I question why there can’t be more health insurance group membership options that are able to factor in changeable employment and geographic mobility while being able to compete with or perhaps be better in cost than employer-based groups.

For example, credit unions developed more diverse and robust membership bases once they were able to offer services to people outside of what had formally been strict joining requirements.

Given the demographic changes we see happening, the time has come to innovate, to take the burden of insuring transient employees off of employers. As people practice building customized careers, one consideration will continue to be how to insure themselves and their families. A health insurance system built for a dynamic workforce will be more practical for employers and individuals alike.

Bill Ryan, founder of Ryan Career Services LLC, Concord, can be reached at 603-724-2289 or