Opportunity Costs Of a Backward Health Care System

TW: Want to encourage entrepreneurship and economic growth? Then support universal coverage. Most folks know someone tied to their current job because they fear losing health care benefits. The lack of health care insurance portability is a big problem for the U.S. economy. So is being the only developed nation in the world without universal care. As the international economy becomes increasingly competitive entrepreneurs will pay attention as well to the risks associated with a health care systems with huge holes for those under 65 yrs and neither wealthy nor poor.

From Andrew Sullivan's blog:
"I'm an American who has also decided to leave the US ...my European wife has a chronic disease that worsened soon after we moved to the U.S. two years ago. I have insurance, but with a sick wife and two children, our bills are quite high. Worse, should I ever change jobs, or get fired, I have no doubt our insurer would drop us, or at least dramatically increase our premiums.

I'm a senior exec in a software company. I've always wanted to run my own company, and I have an idea that I think will work.

But we'll move back to Europe before I take that risk. In the U.S., I just cannot be without healthcare for any length of time. I wonder how many other potential entrepreneurs are discouraged from striking out on their own for this very reason?"

From Ezra Klein at WaPo:
MIT economist Jon Gruber has looked into this, and the effect is quite significant:

'Over the past fifteen years, dozens of studies have documented the detrimental impact that job lock has on the economy. These studies typically compare the mobility of workers who are at firms with insurance but do not have an alternative source of coverage (such as spousal insurance or COBRA continuation coverage) to those who do have an alternative source of coverage should they leave the firm. The studies find that mobility is much higher when workers do not have to fear losing coverage; job-to-job mobility is estimated to increase by as much as 25 percent when alternative group coverage is available…'

...the most convincing research, by Alison Wellington, mirrors the findings of other job mobility studies: Americans who have an alternative source of health insurance, such as a spouse’s coverage, are much more likely to be self-employed than those who don’t. Wellington estimates that universal health care would therefore likely increase the share of workers who are self-employed (currently about 10 percent of the workforce) by another 2 percent or more. A system that provides universal access to health insurance coverage, then, is far more likely to promote entrepreneurship than one in which would-be innovators remain tied to corporate cubicles for fear of losing their family’s access to affordable health care. Indeed, even the Galtians among us should be celebrating the expanded potential for individual enterprise once the chains tying them to a job that provides insurance have been broken..."
http://voices.washingtonpost.com/ezra-klein/2009/09/entrepreneurship_and_health_ca.html