The reality of quote-unquote health insurance

Small business owners are often lionized by politicians as job creators. Innovators. Real Americans.

I don't usually think of myself as a small business owner, but that's what I am. My company (Quote-Unquote Apps) makes software for Mac and iOS. I oversee three full-time employees.

After salaries, health insurance is our single biggest expense. It costs more than the servers. It costs more than the App Store's 30% cut. It's a lot.

In fact, most months, the amount we pay for health insurance is the difference between our being borderline profitable and genuinely profitable.

An outside consultant might look at our books and say, "Man, you need to do something about those costs."

They'd be correct.

The way health insurance works in the U.S. is maddening and unsustainable, both for individuals and small businesses.

The way it is now

I have two very different experiences with health insurance.

As a screenwriter, I get my insurance through the Writers Guild. It's considered a "Cadillac" plan, which seems an appropriate moniker: pretty nice, but not something I would necessarily pick out myself. I don't pay for it directly. When a studio hires me to write something, they are required to kick a percentage of that fee into the health fund.

So while I'm on my union plan, Quote-Unquote's health insurance covers my three full-time employees: a designer, a coder, and my assistant.

I honestly don't know the laws about whether a company our size is required to pay for health insurance. But as a practical matter, I can't imagine having an uninsured full-time employee.

They're not just co-workers; they're nearly family. I care about their safety and well-being. If a medical crisis were to befall one of them, I'd feel morally compelled to help them pay the bills, just as I would for a sibling.1

So they definitely need health insurance. It's not a question of whether, but how.

We originally had a small company plan, but with the dawn of the Affordable Care Act, it made more sense for employees to pick their own plans on the exchanges.

This shift came with some pros and cons:

PROS:
– The plans are slightly cheaper, mostly because the employees are fairly young.
– The plans are portable. When they stop working for me, they can keep their plans.

CONS:
– Employees have to research plans every year.
– Reimbursing employees for health insurance counts as taxable income.

Bring-your-own-insurance has given employees more choices and more responsibility, but I'm not convinced it's a better experience overall. Because here's the thing:

You shouldn't have to think much about health insurance.

With my Writers Guild plan, I don't have any choices. There's no better or worse WGA insurance. It just is. As a union, we can negotiate on coverage and co-pays, but it's not up to me as an individual to tailor a plan. I can make decisions about whether to see a doctor who is inside or outside the network, but that's about it.

For my employees buying through the exchange, there's no limit to the time they can expend comparing plans and choices.

While the ACA requires insurance companies to offer similar plans, there are always factors beyond the checklists. Some companies have better reputations. Others have larger networks. Every choice has trade-offs, and each employee has to decide what makes the most sense.

But the choice itself has a cost, too. It's time you're not spending doing your job. It's mental energy burned and frustration and worry. It's a tax on productivity.

The way it's headed

Defending the GOP's new American Health Care Act, Paul Ryan argues that his plan "is about giving people more choices and better access to a plan they want and can afford."

For the poor, the gap betwen a plan they want and can afford seems to be alarmingly vast.

But even for better-off Americans like my employees, Ryan fundamentally misunderstands the reality of getting health insurance.

People don't want "more choices." The problem isn't a lack of choices. It's a lack of affordable quality health care.

People don't want "better access to a plan." They want better access to health care.

"More choices" is the kind of markets-fix-everything logic you hear from people who are already on Congress's Cadillac plan. Paul Ryan doesn't have to pick health insurance on the market. Like my WGA insurance, his simply comes with his job.

I don't know whether the GOP's plan or something like it will pass. It's obviously flawed and widely despised, yet that seems to be the hot new trend these days.

As a small business owner, I'm determined to keep my employees covered with health insurance one way or another. Still, I'm convinced that we're doing it wrong as a nation.

Health care shouldn't be tied to your job at all. Whether you're a screenwriter, a Congressman or a preschool teacher, your employer should be paying your salary, not determining which doctors you're allowed to see. Our current system is a relic of an older age. We’re an aberration among world economies.

As both an employer and an American, I don't want more choices, more freedom, more flexibility in health insurance. I want health care. I want there to be one imperfect plan that simply works, and to hold our elected officials responsible for its continual improvement.

  1. Paul Ryan would probably say that this is paternalistic, which is a way of dismissing guilt when it's inconvenient.

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