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- [00:00]
A
No, that's fine. I'm just looking at the. What do you call it?
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B
Outline.
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A
And I was like. But I want to know the backstory first, because I know the backstory. Sort of.
- [00:08]
B
Because I've ruined you. Because now I've ruined you into thinking like, sorry, you only gave me 75 years of context, and that simply ain't enough.
- [00:18]
A
Simply is not enough.
- [00:20]
B
Okay, excellent. I've won something. Hello, and welcome to Optimist Economy. I'm Katherine.
- [00:33]
A
I'm Robyn.
- [00:33]
B
On this show, we believe the US Economy can be better, and we talk about how to get there one problem and solution at a time.
- [00:47]
A
At the top of the show, we make a couple announcements. First, if you got a direct message from us on TikTok, it wasn't us.
- [00:54]
B
No way. No way.
- [00:55]
A
Second, we are going to send out a listener survey. So if you get that, that is us, and please fill it out, we'd like to know your thoughts on what we're doing well, what we could do better, what you'd like to hear more or less of in season two.
- [01:08]
B
And I mean bonus. Just FYI, if you fill out the listener survey and you give us your email, we. We will send you a free sticker eventually. It won't happen quickly. We're trying to set up a merch store, which is another cool announcement, but it's just. We're not moving that fast. Me in particular. Takes me, like, 20 minutes to get to the kitchen from here. So. So we're going to set up a merch store. It'll have stickers, and we. We're going to have custom stickers for people who fill out the listener survey. Our next segment is Retcon.
- [01:43]
A
Retcon.
- [01:45]
B
In our episode about unemployment insurance, I said that there were certain industries that end up using unemployment insurance a lot because they have seasonal work. And one of you wrote in to point out that the agricultural industry, in particular field laborers are often working from, say, March to November and will collect unemployment insurance in the off season. There's a lot of people who work for the public school system who also are sent kind of into layoff for the summer, can pick up unemployment insurance and then get rehired in the fall.
- [02:15]
A
We also got an email from somebody pointing out that in your executive order for statehood for the District of Columbia, you suggested, or I did not correct, whether the District of Columbia was larger or smaller than Rhode Island. Somebody from Rhode island wrote in to say, I have been waiting for you to retcon this all season. In fact, Rhode island is bigger than The District of Columbia, it has a population probably Almost half million, 400,000 to 500,000 people more than the District of Columbia.
- [02:45]
B
That's big because I think D.C. is around 700,000. I think D.C. is larger than Wyoming. For sure.
- [02:50]
A
It is larger than Wyoming. It is not larger than, population wise.
- [02:53]
B
Than Delaware or Rhode island or Rhode Island.
- [02:56]
A
Okay, that's it. So I wanted to make sure I got to that this season before we wrapped up.
- [03:03]
B
Sorry, Rhode Island. Yeah, I guess. I mean, if you were, like, geographically small, you would want to know, like, hey, we punch above our weight, population wise.
- [03:10]
A
I did say, I know you guys are both big staters, which, you know, that's fair.
- [03:17]
B
That's totally fair.
- [03:19]
A
Our next section is terms and conditions. Catherine, did you look up anything this week for terms and conditions? I looked up parvenu. I am embarrassed to say this a little bit, but my wife has a much bigger vocabulary than I do. That's tough by a long shot.
- [03:38]
B
She knows it too. Right.
- [03:39]
A
And so we're on a walk last night, and she just throws this word out. I was like, what? Anyway, a parvenu can be a noun or an adjective, but it means one that has recently a person who has recently or suddenly risen to an unaccustomed position of wealth or power and has yet not gained the prestige, dignity, or manner associated with that position. So somebody like an upstart, it can be mean nouveau riche. And it was also interesting when I read this, apparently a lot of the words that we use to mean, you know, parvenu are from the French. I don't know what that says about the French.
- [04:18]
B
But anyway, I was like, wow, this is its own wor word. Good for it.
- [04:23]
A
Yeah. I'll let you all imagine uses for.
- [04:25]
B
This word of how parvenu came up in context in America in 2025. Sure, sure. I do like that there's an equivalent of new money for, like, new power. I appreciate that.
- [04:38]
A
Yeah, yeah. R of East, I think, is also, you know, nouveau riche. All these are French terms for having accelerated rapidly, perhaps too rapidly into the upper classes.
- [04:51]
B
Parvenu. Okay. I mean, this is one that I would want to use in, like, the perfect, most devastating fashion. And then. But I'd have to be like. And I'll tell you what it means, too. Like, it always takes, like, a little bit of the bite out of the zing.
- [05:04]
A
Exactly. And also, if you're not real confident in your use, when you drop it, you're like, and it's a parvenu.
- [05:10]
B
Yeah. Expect that Much from a par venue like yourself. Supernatural with words too.
- [05:23]
A
So for our big pilcrow today, we're going to talk about health insurance and why you have to have a job to have it.
- [05:31]
B
This is a question we get a lot and we haven't talked about health insurance. Healthcare in the US this is for our special 24 hour marathon Ken Burns episode of Optimist Economy where the one problem is healthcare in America. And then we'll take a break and come back for the next 24 hours. It's a big, big problem. And so we wanted to start somewhere.
- [05:55]
A
And we know that people are really interested and we also know that it affects everyone.
- [06:01]
B
I mean, I've thought really long and hard about how the optimist can take on healthcare in the US like what's a way to chip away at this problem? And I think what we're going to try and do this episode, this special seven hour episode. No, it can't be seven hours. I thought the one way to start is that the biggest problem with the U.S. health insurance system is that it's tied to work. Yeah, yeah, that's problem number one. Yeah, but that's not a problem everybody agrees is a problem from a design perspective of like if I had to sit down tomorrow and Congress was like, catherine, we're locking you in your room and you have 24 hours to design health insurance. Wouldn't think twice. First thing that goes is linking it to employment. So I wanted to do an episode where I try to like pitch in a few ways why we should not have employer sponsored health insurance.
- [06:55]
A
I mean, I'm probably the wrong person to pitch this because I've been self employed and part time employed and there's nothing good about the way that this has worked out in my life. So I may be a way too sympathetic audience to this.
- [07:11]
B
You're just my hype man today.
- [07:13]
A
Like your hype man today. I'm just like, yeah, go. And I won't interrupt.
- [07:19]
B
Well, okay, so I'm going to try this three ways. Maybe you can tell me which one you think is the most compelling.
- [07:24]
A
Do you want to start with the origin of this?
- [07:27]
B
Oh, yeah. Okay. So there's. Yeah. So my three ways are history, present, worker. So if you were to watch a show like the Gilded Age or I don't know, anything set in like the 1800s, if you need a doctor, like you go and get one. Like the doctor comes to you, you don't go to the doctor. And people only went to hospitals when they were poor and dying. So they were really, like charitable places where people died. And there wasn't like, a ton of health care in general. In general. That doctor's toolbox was borderline empty.
- [08:05]
A
We had leeches, and we had no antibiotics.
- [08:09]
B
Big old bottle of leeches. Gauze. Gauze for days. So in the 1920s, there was this former school teacher in Dallas who, in the early 20s, right after the Spanish flu, he had worked for the Dallas public school system. And they had this problem, which all goes back to, this is why we need paid sick days. But bas basically, teachers would show up to work sick because if they didn't show up, they didn't get paid. And so he created for the Dallas public school system a sick fund where everyone would pay into it, and then if they didn't show up to work, they would get some portion of their pay through the sick fund. And this was really popular. This. The teachers liked it. And he was like, great. All right, so he leaves the Dallas public school system and works for Baylor Hospital in Dallas. And it's 1929, right? It's right as the crash is taking place. And hospitals are seeing their financing model break, because they're no longer just places that charities would support as people go and die. They're now places that actually provide care and surgeries and things like that. So he went back to the Dallas school teachers and he said, all right, we can basically take what we did for this sick leave fund and put it into a hospital fund. So you pay 50 cents a month, and that will buy you, like, 21 days of hospital services. And that is really the first successful private health insurance plan in the United States. By the time you get to around 1940, the American Hospital association has picked up on this plan, and it'll eventually become Blue Cross. Oh. So the Baylor plan, we know today as Blue Cross, and it becomes a plan adopted by hospitals across the country is Blue Cross. Now, the American Medical association, which are doctors, they realize that they can come up with a plan that's quite similar, and so they develop a similar one. You know, you pay a fixed fee per month. It gets you a certain amount of services, and they call theirs will become Blue shield.
- [10:15]
A
So we can blame Texas for all that ails our health insurance system.
- [10:20]
B
Come on. No, I would say no. Like, at this point, like, this is what's in the mix. At the same time, many public legislators and researchers are trying to come up with a version of a national health insurance system. So you've got, like, kind of bubbling in the background is how healthcare is delivered. In the United States and the shifting preferences from where you go see a doctor and what hospitals are for. The kind of like the third thing.
- [10:56]
A
Is that third leg.
- [10:57]
B
The third leg is that since Teddy Roosevelt, presidents and administrations have been trying to come up with a successful national health plan. Roosevelt too had one and endorsed one. It was something that was very important to Queen Frances Perkins. And all three of these things basically hit World War II, right? So as part of kind of wartime production, which is a big deal in the US the administration passes wage freezes. So they need a lot of people to go to work. We passed a union law in the National Labor Relations Act. Roosevelt gives wartime production preference to unionized shops, negotiates with them to have a no strike clause during the war, and is able to get wage freezes in order to keep wartime production costs low. But they do not freeze fringe benefits. So now health insurance, which is included in one of the fringe benefits, takes off amongst the wartime production industries because they can't get a dollar pay raise, but they can get non wage compensation and that has no limits. And so they can ask for health insurance. Okay, So a really important thing happens in the U.S. which is that in 1953, the IRS and the Revenue act establishes that the money that your employer spends on your health plan is not subject to the income tax, nor is it subject to the payroll tax. So if I pay you $50,000 a year, you have to report all of that income to the IRS and you have to pay payroll taxes for Social Security on all of that income. But if I supplement that with $15,000 health insurance plan, I don't have to pay for it and you don't have to pay for it. When it comes to taxes, they're tax exempt. Not only that, but it's a qualified business expense. So I get to deduct medical expenses and health insurance plans that I provide for my employees as a qualified business expense from my eventual corporate tax bill. So the tax system in 1953 puts like a double bonus on employer sponsored health insurance plans. And honestly, the rest is history. The fight for health insurance in the U.S. i think most people would associate with like there's this kind of like apocryphal tale that Francis Perkins has got this like list of things that she wants for the US worker. And she tells FDR right when he says, like, will you be my secretary of labor? I want a minimum wage, I want union protections, we need a Social Security. And she gives him this list of demands and the health insurance comes last. And she just doesn't get to it before World War II starts, but really the biggest champion of national health insurance in the United States that we have ever had in the White House was Harry Truman. Truman was a president who said this was the centerpiece of his agenda. Here's a quote from Harry S. Truman. The real cost of our present inadequate medical care is not measured merely by doctor's bills and hospital bills. The real cost to society is an unnecessary human suffering. And the yearly lost of hundreds of millions of productive working days makes the.
- [14:27]
A
Economic argument, uhhuh, could have, could have been today.
- [14:31]
B
So yeah, so his plan that he released in 1945 looked like this. Every wage earning American would receive comprehensive health insurance. Patients could choose their doctors. Physicians would not become government employees, but the government would set reimbursement rates to incentivize them to practice in rural and low income areas. Preventative care would be emphasized and money funds collected to pay for the system would also be used to replace income lost by individuals when ill or injured.
- [15:02]
A
Wow. So it would be a paid medical leave and a health insurance program all in one, huh?
- [15:06]
B
Yes. And he put as part of the legislation to expand medical schools and provide financial aid for low income medical students and that the federal government should be in the business of funding constructing hospitals and clinics wherever.
- [15:22]
A
Wow, what a different world we're on.
- [15:24]
B
A different living in. Yeah, that timeline is very different from our timeline. And that timeline was defeated largely because of the American Medical association, the American Hospital association and the Chamber of Commerce. So like doctors, hospitals and businesses come out swinging and say we do not want this bill. And he tries, I mean in both administrations, but he was not able to get this through.
- [15:47]
A
He did swing for the fences.
- [15:48]
B
He did. And kind of a fun fact left over from this is that Johnson in 1965, when he signs Medicare and Medicaid into law, he does it in Independence, Missouri at the Truman Library. And the first two enrollees in Medicare are Harry and Bess Truman. Because he said he was inspired by what Truman tried and failed to do. And even, I mean there's some article I read that was like, even like a 80 year old Truman was like, still bullshit. We still need a national plan. So I mean that's, that's kind of how we get to where we are, is that there's like circumstances of war that almost enshrine this private system that was not designed. I mean that guy in Dallas, he wasn't trying to design a health insurance.
- [16:38]
A
Plan for the country.
- [16:40]
B
300 million Americans we have today.
- [16:43]
A
And so why this strong opposition to this because it was gonna set reimbursement rates and doctors didn't want somebody else setting that.
- [16:50]
B
I mean, my understanding was at the time it was taking off, like the weaknesses of the system weren't really apparent. Like they were enrolling tens of millions of Americans in employer sponsored plans every day.
- [17:02]
A
And they were cheap.
- [17:03]
B
And they were, they were cheap. I think there were obvious weaknesses to the system for people who were either too poor or too old. But that was separate from most of your, like typical middle America was enrolling in a private health insurance plan that they liked and it was taking off. I mean, this was in a period of massive expansion to the employer sponsored system. Where we go from, you know, maybe 10% of people having private health insurance coverage to well over half in an incredibly short amount of time. So it's, you know.
- [17:33]
A
Yeah, so it's going to kill the, it's going to kill this golden goose that these businesses that are the health insurers now. Right, the employers. Yeah, right.
- [17:42]
B
It was the golden goose. It's not the golden goose anymore. Maybe this is the easiest thing to sell. Like that's not hard to convince people they don't like their private health insurance perspective, but from a system perspective, it's obviously bad. But on an individual perspective, if you have nice fancy health insurance and you don't pay taxes on it, why would you want to get rid of it? And so my second kind of case is why you would want to get rid of employer sponsored health insurance. Why it's not as good as it seems.
- [18:11]
A
What I, what I think is always interesting is how much inertia sets in and how, how quickly it sets in.
- [18:18]
B
It feels like accident, providence and inertia and not what do we need if we were going to ask what we need? I mean, Truman knew it in 45. Like it's, we know what we need. We just getting past what we have is really tough. And health insurance, I mean, it matters to people and I completely get it. Changing health insurance is, is scary. I think what's changed about, or maybe what's different about 20, 25 is how many people's health insurance is changing already. Employer plans are expensive, they're getting worse. I posted something about how, damn it, when I testified in front of Congress, in front of the Joint Economic Committee, I said that they've done nothing for fertility. And if they really wanted to help, like if they were really concerned about demographics, at the very least they could take barriers that people have to having a kid and get rid of Those barriers. And I brought up that according to the Kaiser Family foundation, the average out of pocket cost for someone who has a large group employer sponsored plan for labor and delivery, it's like three to five thousand dollars. You tax birth.
- [19:40]
A
Yeah.
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B
Any economist will tell you if you tax something, you'll have less of it and you're taxing birth. So what do you think is going to happen? And I mean the comments that I got on TikTok were like, I'd like to know whose fucking plan that is. And all these women saying about how many tens of thousands, like $10,000, $9,000 it cost this. They kept me for a night because I had blood pressure, moved me to this point. And I like, I was like, oh, this is different. This is different than like fighting for Obamacare in 2009 of like you're trying to, with like a degree of data and evidence to talk about a problem with the system. And everyone's like, it's worse than that.
- [20:15]
A
Where'd you get that?
- [20:16]
B
Where'd you get that number? It's a lie.
- [20:18]
A
I mean, I have an employer based health insurance plan and I every year still go shop around because it's expensive and I don't particularly love the coverage I get.
- [20:28]
B
Yeah. And I mean there's a hunger for sure in this very uniquely American system of employer sponsored health insurance has had problems for a long time. And when we're ready to walk away, Congress has in some ways been ready to walk away for a long time. And I know this, Congress doesn't seem like it, but it's.
- [20:46]
A
Yeah, Congress just can't figure out what to walk toward. But, but everyone knows that whatever's happening now, I mean, not only is it not working for patients financially, like that doesn't mean get into the other problems that it's. I don't know if it's created them or exacerbated them, but certainly hasn't, hasn't lessened them shortages of doctors.
- [21:06]
B
And I mean the other half of this too is that it is rightfully the case that if you see a reduction in private health insurance, you will see an increase in public health insurance, which costs taxpayer dollars. And so there's an aspect of this that's like, I don't like the current system, but I don't want the government involved or like I don't want the government to get bigger. I'm gonna throw out some statistics for y' all about coverage. So one of the truly horrendous things about the employer sponsored health insurance system we have now is that we know that it's more likely to go to highly educated, high earning people who themselves are healthier. So we have this massive private health insurance system that is in fact cream skimming and they are covering the healthiest people in the US under 65, has a high paid job. And if you're sick, you're chronically sick or you're dying, that's not your coverage.
- [21:59]
A
When in fact you might lose your job and lose that coverage.
- [22:03]
B
Yeah. The most expensive people in the United States, the federal government already picks up the tab. Medicaid covers 35% of all disabled individuals in the U.S. including 61% of all long term care recipients and covers 41% of all births. Medicare on the other hand, covers 80% of all deaths. And not for nothing, the last year of life is the most expensive one from healthcare's perspective. So in exchange for not covering those people to a large degree and having the federal government pick up the tab on either the Medicaid or the Medicare side, those tax preferred status of health insurance premiums as part of your paycheck that totaled $384 billion in 2024.
- [22:58]
A
So wait, you're saying employers saved $384 billion in. Not employers, but employers and employees essentially by not paying tax on that? Is that what you're saying?
- [23:09]
B
Yeah. Yeah. So like let's say that you're in that $50,000 a year job and you have a $15,000 a year health insurance plan.
- [23:18]
A
Yeah.
- [23:19]
B
Not taxing that $15,000 plan for either Social Security, payroll taxes, federal income taxes on your side, or on the employer side, that is around $384 billion a year.
- [23:33]
A
That's just like, I don't know what to call it, like a gray zone of untaxable money that's just moving around that.
- [23:40]
B
Yeah, gray zone. That's one way to think about it. I mean the technical term which is maybe not be helpful is that it's a tax expenditure, which is what we call it when the federal government doesn't collect taxes for something specific. So that it functions like it's spending, but it's spending through the tax program. So the mortgage interest deduction is a tax expenditure. Your retirement savings, that is tax preferred, that's a tax expenditure. And money that we could collect on employer sponsored health insurance plans. It is the largest tax expenditure in the United States. It is the most expensive thing that we fund via the tax system. It's not the most expensive thing we spend money on. So Medicaid, all of Medicaid costs around $900 billion a year and the federal government pays for two thirds of that. So around $600 billion a year. I mean, I'm trying to put that $384 billion in context. So double it and you'll pay for the federal government's share of Medicaid. Triple it and you'll pay for the total cost of Medicaid. I think the problem that I have is that it's not just that it's expensive and that we spend so much money on it through the tax expenditure system, it's just that the coverage isn't that good. I mean, if you're on Medicaid, you don't pay anything out of pocket. If you have an employer sponsored health insurance plan, we're paying $384 billion a year in tax expenditures to still have people spend thousands and thousands of dollars on premiums, on out of pocket costs, on prescription costs, on things that aren't covered. To go through an incredible amount of paperwork asking for things. I mean, it would be one thing if this coverage was incredibly good, but instead we have this in hand. The idea that it's deteriorating and it's soaking people who are using it, it's.
- [25:25]
A
Soaking people who aren't using it, it's.
- [25:27]
B
Soaking people who aren't using it. Like Medicaid has a price tag, Medicare has a price tag. They're really obvious. And so it looks like this is so much government spending and like we have to keep this private coverage.
- [25:38]
A
If we expand that, it'll be terrible.
- [25:40]
B
So Medicaid, for example, it's not like you get a $25,000 healthcare check every year and then you get consume that much Medicaid. Medicaid is a reimburser. You basically charge Medicaid whatever it is you consume. And so we know for example, that on average children who are covered by Medicaid cost Medicaid roughly three grand a year. Adults who are covered who don't have a disability, who are on Medicaid cost like 4 grand a year versus people with a disability will cost upwards of 20 grand a year. I'm sure someone heard 3 grand a year and was like 3 grand a year for kids. That's more than I pay for my health insurance premium copay at work, let alone out of pocket costs at the doctor's office. But it's not just that we spend a lot of money on this private health insurance system. That doesn't seem obvious. It's that the cost control part on that side is also not obvious and it's not clear that it's there. And then my third case of why, you know, you don't care about history, you don't care about the current system. Health. My third case would be this messes with the labor market. It messes with your job whether or not you can see it. Health insurance messes with your job by having health insurance at work. I mean you can see it on the level of like I can't switch jobs or I can't retire because I have to keep my health insurance. Like the further you zoom out, the worse it gets. Really? Like oh yeah, because well first off, employers aren't equally rich who can offer health insurance. How good of a health insurance plan can they offer? Does it vary by large companies and small companies? Yeah, it absolutely does. So now we've got a labor market where we're trying to match people from like skill and human capital perspective to the best fitting employer. But a lot of them are going to just take the job that has the best health care, which is really just who, who had market power on the employer side to self insure.
- [27:35]
A
Right.
- [27:36]
B
We like in all in small businesses and the smaller the company it tends to be the more expensive for the employee to have health insurance. So now you're making less money and paying more for health insurance simply because your company doesn't have the purchasing power to have a better, larger plan. Well, this definitely hurts smaller companies and it leads to worse health insurance, worst health insurance for certain people. Job lock, the notion that you won't leave a job because you are worried about losing health insurance, that's definitely a.
- [28:07]
A
Thing, a real thing. Is there a measure of that? Like do we have been studied by.
- [28:11]
B
Economists for a long time? Like going, I want to say going back to the 80s, there's like the earliest studies of job lock. I mean think of this in a country that doesn't have paid family and medical leave. Like now your spouse is dying, given some type of terminal diagnosis and not only can you not take leave to take care of them, you can't stop working because they're on your health insurance. The other part, just to make clear, I don't like employer sponsored health insurance for so many reasons, but as a labor economist, y', all, I mean it results. It's not just that it hurts your wage growth that your employer is paying for health insurance and that that cost, the cost of health insurance is rising faster than your wages. And so you're now having your take home pay competing with something that's Very, very expensive. We don't necessarily think of retirement plans as having this problem because they. They're deciding how much to contribute. And we've got some, like, pretty good evidence that if you look like you're expensive to insure, your wage will be less. Not like everyone's wages go down or are depressed or suppressed in terms of growth because of how much health insurance cost. I mean, like, if you're a woman of childbearing age, if you're obese, you will make less money because you look more expensive to insure. So the pregnancy.
- [29:28]
A
I'm a woman in my 50s. I'm a expensive to insure. If I go to look for a job, you're saying an employer would look at me and say, we're gonna. Like, we're gonna just shave about five grand off of what we're gonna offer her.
- [29:40]
B
Yes. The evidence, I think that that illustrates it the most for me is the Pregnancy Discrimination act of 1978.
- [29:47]
A
Okay.
- [29:48]
B
So the Pregnancy Discrimination act of 1978 did a lot of things, but one of them was that it added pregnancy to sex discrimination protected by Title VII of the Civil Rights Act.
- [30:02]
A
Okay.
- [30:03]
B
So health insurance plans would be like, oh, we have this health insurance plan. We don't cover pregnancy. That's a form of discrimination. So now it requires them to cover pregnancy. And an economist looked at the wages of women of a childbearing age before and after the law went into effect at firms that were hit by this legislation, and it was lower than it was before. So, like, if they're getting a 5% raise every year, and now the employer has to cover pregnancy, doesn't matter if the woman was pregnant. Every woman who's, like, married in 30, her wage is only going to grow 2% a year.
- [30:36]
A
I mean, isn't the whole point of insurance that it spreads the expense of these things across an entire population evenly? And.
- [30:44]
B
And.
- [30:44]
A
But employers don't have to do that. Employers can. Can skim it on the salary side.
- [30:48]
B
Yeah. The premium might be the same for every employee. Or, you know, it's like, here's one person, here's your spouse, here's your kids. We have these plans, but the wages don't have to be the same.
- [31:00]
A
That's crazy.
- [31:01]
B
Yeah. Like, y'. All. This mars the labor market.
- [31:07]
A
Yeah.
- [31:08]
B
I mean, this is not necessarily to your benefit the way that this interrupts the labor market of, like, which employers in which employees benefit from this system. Yeah.
- [31:17]
A
Do you have any sense of the broader. You're talking about job lock. And I often Wonder how many people would go do something else if they were not locked into their job because they need health insurance for themselves and their families and the cost to our economy. In lost innovation and business startups and creative work, there are a lot of, a lot of things that people just can't do because they can't risk bankrupting their family.
- [31:49]
B
Kind of like the first wave of job lock studies were really looking at job switching amongst people who did or did not have employer sponsored health insurance. And then it had evolved over time to look at who is the least likely to switch. And it's people who have health concerns like a sick partner or a long term chronic illness, you're going to be less likely likely to switch your job. That's job lock. Or if you have that condition or if you're very risk averse and you're worried about something related to met. Like we can pick out the people who don't leave and switch and we can identify them in data sets. It's just hard to find in a data set someone who is like sitting on a dream of starting their own business, of doing something creative or risky that they don't get to do because they need to have health insurance. That's just harder because we can predict what will keep people in place, but we don't have a way of understanding what's lost. Maybe wage growth, right? You know, job switching is associated with wage growth. Like we can probably come up with a wage profile but I mean economists aren't that creative. Like there's not that much else we can say about it. We don't know how many would be businesses there are or would be. Creative works would be gambles on a dream. You know, something very American.
- [33:08]
A
You know, I think about like would be startups, right? I mean even, you know, some of our most successful big companies now they weren't all created by college students in garages. They're created by people who worked in industries for a long time and saw a need. And that's great if you can go out and create that business. My instinct, again not an economist, is that the older you get, the harder that gets to do. In part because you have more responsibilities, you are responsible for more people and your health is maybe more precarious.
- [33:39]
B
I mean, obviously I think about it in terms of like my own, like prison of my own point of view. But you know, I know a lot of women who would want to go half time for what with their kids at home or who just they have an idea for like a hobby based Business. Like they want to run their own Etsy shop, but they still need more income than that. Like it's not 100% job, but they really can't do it because if they drop below full time, they lose their health insurance. We also don't have a great way of understanding how many people are hit by the full time need.
- [34:08]
A
Yeah.
- [34:08]
B
And then like let's circle back to every episode where we've said something like paid family medical leave gets harder to implement if you are on health insurance that whole time and now they're paying for the health insurance of a person on medical leave. You know, it puts a real downward pressure on the amount of time that you can be gone. I actually was asked to be a reader on a study. This is kind of a line of business I have of people want me to give like a really harsh economic point of view to something so they'll give me a paper. And I'm almost like oppo research of like destroy this. Like an economist would destroy it.
- [34:40]
A
And it's not. Is it economics, economic, like journal journal articles and papers?
- [34:45]
B
No, no, it's like policy proposals. They're policy proposals that basically like someone is worried an economist is going to be an economist about it and just on it. And so they pay me to do it ahead of time.
- [34:57]
A
I love it.
- [34:58]
B
And give them the argument. And I definitely had one that was also about maternity and paternity leave that was like the universal right needs to be for six months. And I was like.
- [35:15]
A
I don't know.
- [35:15]
B
If I'm writing as like an economist or just as Catherine, but like that's a long time for some people. And. And then I was like, you cannot talk about this if you don't talk about health insurance. For the record, if you want six months of maternity leave, I want that for you. I will fight with my last breath for you to get as much maternity leave as you deserve. And we can afford. And it's absolutely six months. Why the fuck not? Not for me, for you. But you cannot ask for that and still have employer sponsored health insurance. So the amount that it cost us in terms of policies that we could have, I mean, that's like going back to Truman's quote that this is a toll we cannot calculate. Not just of the people who can't leave jobs or the people who can't retire, or the companies that aren't started, or the creative projects that aren't embarked on. The wage is not earned, the jobs you can't take because the health insurance isn't as Good. And then it still comes down to in all of the other policies that we want in our country that have to work around this terrible health insurance system that we have that ties employees employer insurance system. The idea of Obamacare was this. We're going to make a private market wraparound for everything. Like you have Medicare, you have Medicaid, you have employer sponsored plans. The private market is crap. We're going to make it better, we're going to regulate it, we'll subsidize it. And if you do change jobs, you can always go into the exchange. What I thought was interesting about Obamacare is that I have never liked it, but it was really a compromise plan to prop up. I mean it is not propping up Medicaid and Medicare. It is propping up employer sponsored insurance and the people it doesn't cover.
- [36:57]
A
Well, that's interesting that you think it's propping up the employer sponsored health insurance side. I have always thought of it as propping up private insurers for whom there would no longer be a market for these kinds of policies because they just price themselves out of the market. How is it that you see it propping up the employer side of that business?
- [37:15]
B
You have some people who get health insurance through their job, some people who are low enough income to get health insurance through Medicaid, and some people who are old enough to get health insurance insurance through Medicare. And then you had this big group of people that didn't fit either case. I think the more progressive and probably more efficient approach would be to basically opt everyone into Medicaid and if you don't have coverage, you're automatically enrolled in Medicaid. Medicaid expands, it pulls more and more of the population and people start to have less of a preference for employer plans and so they'd rather just take the extra money. I think if you had a cheap public alternative to private plans where they have, I mean, Medicaid has very strict reimbursement rates. It's one of the lowest pain reimbursements. There are problems with Medicaid. But you know, you default an extra 35 million Americans onto Medicaid and then every time you switch or lose your job, you get defaulted onto it as well. Eventually employer plans will be sunk. Some of the best evidence we have about what health insurance does has come from Medicaid expansion. There was one in particular, a lottery in Oregon where they were opening up Medicaid. They had more people sign up than they had space for. And so they put people in a lottery of who got Medicaid versus not. And then you can just look at the difference to say, like, well, what did Medicaid do for people who did it make the biggest difference for. Listen, Medicaid ain't perfect, but it's better than being uninsured and it shows. And then, I mean, you just get these like, pretty incredible results on preventative care, on mental health, on physical health, on uses of treatment. You throw that into a state that's allowed to do this over a waiver, we'd never go back. And you could say, like, look, I think you're right. Why don't we just let California do this? Actually, I think I would go for Washington or Oregon.
- [39:07]
A
Yeah, I would too.
- [39:08]
B
California's pretty big. Massachusetts. Sure. Andy, shout out. Massachusetts could do it pretty easily.
- [39:14]
A
Massachusetts could do it. Washington could do it. Minnesota could do it.
- [39:17]
B
Yeah. And you just, you're like, okay, like, we will put in some money. Like, we'll invest and we'll let you see how good you are at this. And yeah, I don't. Something people would go back, well, what do you think?
- [39:27]
A
You know, what does an employer do if you start to diminish the tax deduction, for instance, that employers take?
- [39:35]
B
A lot of employers would drop coverage.
- [39:37]
A
They would just drop coverage. So all these.
- [39:38]
B
Or they would only offer it to a small set of like their highest paid employees and they would just, they would drop coverage. It would be too expensive. I mean, in some ways that's the most destructive approach because you basically just, you're toppling the system as opposed to building its replacement.
- [39:53]
A
But yeah, but if you don't do that, then you just punish the employees.
- [39:57]
B
Federal government could pass a law that says that they are going to do a pilot program in five states that will have universal eligibility, and then the results come in real good and we move on. So having some type of Medicaid waiver that lets states with money attached to say, like, anyone can enroll in Medicaid and then seeing what happens over three years. And what would happen is you would have a lot more coverage and they.
- [40:24]
A
Would have to opt out of it.
- [40:25]
B
There's no opting out. Like, you don't have to use it, but like, you're on, you have a Social Security number, you are on Medicaid. Everyone has a default coverage and employers are on a timeline of how long until they lose their tax benefit. Like, you know, we're done. And in fact, part of this discussion has to say, like, how do we keep up all the things that are good about our private system like when you put a huge amount of money to be made off of medical breakthroughs, off of special devices like they're all made here. There's so much more to be thought of on the innovation that we can't talk about in this show. But the coverage part is easy. The innovation part I think is hard. But you know what? I bet if you gave me $384 billion, I could solve that part too. This is why God invented money. I think the getting people onto coverage, that is better plans, we could do that really easily, preserving the innovation of the medical system. We've been using the private sponsored system as a crutch, so we'd have to think of a way to make sure that we keep up that innovation. On the private side, don't you envision.
- [41:33]
A
That we would have supplemental plans the way we do for Medicare?
- [41:38]
B
Yeah. A lot of the people who have proposed national health insurance in the US It's a combination of everything preventative and predictable is public and then everything else that's actually a risk. Like having to get a gynecological exam is not a risk. That's a certainty. You need one. Just like you need colonoscopies and like blood pressure checks and whatever. Developing cancer or getting a car accident, that is an actual risk. And so you, you just divorce prevention from risk or maintenance from risk and you keep the risk part in an insurance plan in which it is harder to predict. We've known for a long time that this system is bad and more and more people are learning about it. So I actually see a ton of optimism here because.
- [42:26]
A
Really?
- [42:27]
B
Yeah.
- [42:28]
A
So desperate about our health system.
- [42:29]
B
Really.
- [42:30]
A
Well, you know, my up close look at the health system in the last couple of years has been on the end of life care side of things. But anyway, tell me your optimism. I need it. Give it to me.
- [42:45]
B
There's a couple levels of optimism here for me. One is when the bar's low, it.
- [42:51]
A
Can only get better.
- [42:53]
B
Ceiling's high. We're not kissing perfection here. We have lots of good things we can do. We have these big impediments to doing them. But it's not as if like you were to take someone who has worked in public health. I'm speaking about a very specific listener right now, and she knows who she is. But if you took someone who was an expert in public health and told her you don't have to have employer sponsored health insurance anymore, what are you going to do? I mean, talk about like roll up the sleeves and like, well, like we're going to have more community health clinics. We're going to have this part of a plan. We're going to have like qualified medical transport so you don't have to take an ambulance everywhere. Like, I mean there's so many things that, like pieces that fall into place and so our potential is so high. I find that to be incredibly optimistic. Every time I talk to someone who has worked in anything like public health or has taken a systems based approach, there's this aspect of, oh yeah, there's.
- [43:47]
A
So much we could do, but there's.
- [43:48]
B
So much we can do about health and make Americans healthier. And like we. There's a lot that actually gives me a ton of optimism that we're sitting on ideas as opposed to scrambling for them.
- [43:59]
A
We are sitting on ideas. That's true. I think one of the things that I find so odd about our system is that the places that those experiments would kind of happen, it's just so expensive that it's impossible for states to, to do these experiments in this day and age.
- [44:16]
B
This will have to be federal.
- [44:17]
A
Yeah.
- [44:18]
B
I think the other source of optimism for me is that the constituency of holding onto employer sponsored coverage, I just think it's dwindling. And at some point this dissatisfaction with the system is not going to be just limited to how much Medicaid costs or how lazy those people are. Like, it's coming down to the private health insurance system is like failing on multiple fronts and that's just pulling more and more people into the constituency of wanting to do something else. You know, it really only takes a couple of things to get this ball rolling. I mean, if I close my eyes and think of 2045, I think that some stuff has come crashing down. Like we can't avoid paid family leave and childcare and all of these things much longer and health insurance is going to be part of that. There are so many things where we have waited way too long to address that are on the horizon that we don't have much time left before it's like, listen, you got to put up or shut up. We need paid family leave, we need child care. We're losing people, we're losing births. Something is going to force Congress's hand. And I think it's the same with health insurance. Of like, this is just, it's gotten too bad for too many people to sustain much longer. And that's not necessarily an optimistic state of the world, but it does tell you that like, you know, change will come because it has to come. Something will change. And I Think it'll get worse, but then I think it'll get better. So that was rambling, but healthcare, let's fuck it up.
- [45:59]
A
Sorry, Sophie, you're gonna just have to make something of this.
- [46:03]
B
Good stuff. Good stuff. What a great show. Okay, executive order.
- [46:07]
A
Executive orders.
- [46:09]
B
Okay, My executive order is that if you order things to your house, we need 90% fewer boxes.
- [46:19]
A
Oh my God. Yeah.
- [46:20]
B
Like you've gotta meet some kind of special test to be able to send something in a box or about box in a box. Some type of overhaul of packaging of delivery services that results in fewer boxes. And I will say that, that, sure, you could say that this comes from an environmental place, but I also have a five year old whose favorite toy is boxes. And I live in a house. I live in a house of trash. I mean just every room has cardboard boxes. Like the kid sees them and just like, I mean it just feverishly unwraps them and then just like throws whatever we purchased aside and like takes the box to the collection of like box land. And I'm like, oh my God, this is a fire hazard. I live in trash. And like now I like, I'm ordering things in secret. Like I'm stealing and like trying to like scurry the boxes away. Recycling before which they don't fit in. Yeah. So boxes. Yeah.
- [47:17]
A
I've made a rule now. So I will say I am glad that the pet food delivery people have decided that they don't have to put two 30 pound bags of cat litter in one box. Because that, let me tell you, has not gone well for any of us. For my back, for the leaking bags, for the things that gets dropped. So that means that I now get three boxes of cat litter and they're just not allowed to come in the house. They just get opened on the front porch and they just. Because once the cats discover the boxes, then we're not allowed to ever, ever. They're like, you know, they're under the dining room table. They're on the dining room table. Anyway, I feel your pain.
- [48:00]
B
Yeah. Creatures love boxes and I need fewer of them. So my house doesn't feel like a recycling center.
- [48:06]
A
Exactly. Okay. Mine is adapters. I feel like every piece of computer equipment I own now requires an adapter. So if you are selling a device that is not going to fit with your previous versions of cars, printers, monitors, like free adapters.
- [48:28]
B
Free adapters.
- [48:29]
A
Free adapters.
- [48:30]
B
Oh, I love it.
- [48:31]
A
And I don't care. I mean it can be like adapter.gov I don't care how this gets implemented. But, you know, I have two of these small adapters, and if I lose one, like, I can no longer function.
- [48:44]
B
Yeah, it's absolutely. It's game over. All right. Endorse great spiritual sponsors.
- [48:52]
A
My spiritual sponsor this week is farmer's markets. That's become my new favorite thing about the weekends. And there's one on Friday not too far from me. And it's just a great way to feel like you're shopping, not in a horrible big box store under fluorescent lighting. And also, you know, they have great. In addition to fruits and vegetables and stuff, great people make pastries and tamales and yogurt, and it's just, it's one of the joys of living in. In Los Angeles.
- [49:25]
B
My spiritual sponsor is just a really nice home cooked meal.
- [49:30]
A
Nice. In our house, we say the meals are 50% better if you're not the person who had to cook them.
- [49:37]
B
Yes. Well, I married someone who's a good cook because I'm smart. But yeah, I really been digging deep of like, the nine month pregnant woman who's miserable all the time of, like, just pulling out some real showstoppers of the home cooked meal. And I'm like, man, this is so much better than anywhere else. Yeah.
- [49:58]
A
Yeah.
- [50:03]
B
That'S our show.
- [50:04]
A
And you can follow us on YouTube.
- [50:07]
B
You can follow us on YouTube. And that's it. That's our show. So I'm Katherine Ann Edwards and I'm an economist. You've been listening to Optimist Economy.
- [50:17]
A
Me, I'm Robin Rousey, an editor in Los Angeles.
- [50:21]
B
Okay, we got there. We want to know, I don't know. Optimist economy is on LinkedIn, YouTube, tick tock, tick Tock. And Instagram. And we like to close out our show by snapping out our producers.
- [50:38]
A
Sophie Lalonde.
- [50:39]
B
Sophie Lalonde. Oh, substack. You got it, Sophie. Yeah, you're right. Sophie Lalonde and Andy Robinson. Thank you so much, guys. Humbling. This is humbling.
- [50:54]
A
Hey, man, I got that YouTube.