Perhaps it looks like that from the employee perspective, but that is because it is, as people have pointed out here, due to the fact that the employee pricing reflects health insurance’s status as an employee benefit.

When the employer goes shopping for insurance to cover large losses, however, its group is experience rated–you have high medical losses in your group? You pay more. No community rating there.

I agree that the pure community rating carried on large, self-insured employers’ books is largely bookkeeping fiction. No doubt the employees’ salaries are adjusted to compensate for much of the actual cost of coverage, at least where age and sex are concerned. Whether this is also true of health status would depend on whether management has access to claims data. My guess is that it would be difficult to adjust salaries in response to changes in health status, so the reality in large companies is probably fairly close to the small-business, age-banded, non-self-insured model.

But, Leaders in Congress are stuck with our current system. Thus, the starting point is a system heavily dominated by employers. As a result, the proposals are little more than a convoluted attempt to simulate European social sickness funds using a series of taxes, subsidies, mandates, employer penalties.

A simulated socialized health care system will likely perform even worse than an actual socialized health care system.

If employee’s are getting their marginal product then no one is getting screwed.

What is being proposed is entirely different. Young people will be compelled to buy a product for which they are overcharged and (in the exchange) there will be no compensating variation in the wage rate to offset this burden.

If Congress wanted to narrow the price range they should have used a cleaned-up version of this approach, instead of dictating prices.