A National Single-Payer Healthcare System Would Be Good for Employers, Too

The National Day of Action is set for May 31, 2025, as a call to action in communities across the United States. The goal is to unite people locally and nationally to eliminate profit-based healthcare. This nonviolent campaign is a collective effort that aims to put National Single Payer on the national agenda. Everyone has a basic human right to healthcare.

This opinion piece shares research findings to advocate for a single-payer healthcare system. Among wealthy countries, the U.S. has by far the most expensive healthcare system, and yet the only one without universal coverage. It is fundamentally broken. The system is inequitable due to differences in insurance availability based on work status, income, and other factors. Individuals of different backgrounds don’t have the same level of access to quality healthcare services. Excess administrative costs for insurers and providers add to an estimate of $504 billion out of $1.1 trillion. The time that it takes providers to complete billing tasks can compromise patient-provider relationships and care delivery.

Employer-sponsored insurance plans are the mainstay of U.S. health insurance. More than 156 million Americans (workers and their families) are covered by job-based insurance. The plans can incur high costs for employees and their families. It also places a burden on employers, including premium payments, time spent managing insurance, and potential compromises to hiring and worker productivity. One study estimated annual transactions costs to companies of $21.6 billion. Time spent by employees dealing with insurance issues may constitute the “sludge” that reduces productivity.

“All my employees are friends of mine. It really pains me to see them not go to the doctor, especially for specialists.”

Researchers at the University of California, Berkeley and the University of California, San Francisco studied the consequences of the U.S. system of health insurance on employers. We conducted seven company case studies, with companies in various industries and of varying sizes. Companies were qualitatively and quantitatively explored for the burdens imposed on employers by providing health insurance to their workers and dependents. We interviewed company owners and managers. Below are summaries of the findings:

• All of the companies care about employee health and financial well-being. They strive to provide reliable health insurance, though employees often have other options (spousal coverage or Medicaid).

• Strategies vary widely in terms of types of coverage. Most companies reported substantial management time overseeing the insurance process. Several companies have utilized brokers or consultants for assistance.

• The two largest companies (both in the manufacturing industry) incurred unique costs related to being self-insured.

• Premium and other financial costs represented 4% to 27% of labor costs. The management cost component is up to 50% of the premium cost. Employee productivity lost to insurance activities was not significant. While there hasn’t been a significant impact on business operations, such as strategies to increase production to meet demand surges, it does affect hiring and can lead to significant costs.

Below are direct quotes from some of those interviews:

“Where [health insurance] really has an impact is who we can hire. The people who would want to work for us would want insurance and so that was always a big barrier to getting talent.”—Owner, Custom Gifts and Products company

“The cost of health insurance has limited, I mean that there’s a certain limit to my profit margin and particularly with other factors such as supply chain issues... I’m getting squeezed on a lot of different fronts, and if my health insurance didn’t go up 10% every year, I could pay people 10% more every year... They don’t want to give up their health insurance, but I think they know that it’s suppressing the wages that we can pay.”—Owner, Print and Design company

“All my employees are friends of mine. It really pains me to see them not go to the doctor, especially for specialists... And our specialist cost is very high... And for some of our employees, especially the warehouse employees, they’re not super high compensation.”—Owner, Aviation Distribution company

To conclude, job-based insurance poses health-related and financial burdens on company employers and employees. These burdens would disappear with the implementation of a national single-payer healthcare system.