Has the demise of employer-based insurance begun?

There was a lot of public discussion last week after the U.S. Supreme Court decided Hobby Lobby doesn't have to cover certain kinds of contraceptive devices in its health plan.

Whether you or I agree with the decision isn't the subject of this column. I'm wondering if the case will eventually lead to the erosion of the employer-based insurance system.

Those who are outraged by the ruling think so. The theory goes that if individuals were wholly paying for insurance coverage themselves, no one could tell them whether they could have certain coverage.

Princeton Economics Professor Uwe Reinhardt writes in a New York Times piece that the Hobby Lobby decision "raises the question of why, uniquely in the industrialized world, Americans have for so long favored an arrangement in health insurance that endows their employers with the quasi-parental power to choose the options that employees may be granted in the market for health insurance."

Some experts believe if there was a single-payer insurance system, all insurance would cover contraception, and there would be no instances of religious beliefs interfering with health benefits. But that's making a gigantic assumption that the federal government would decide to use taxpayer dollars to cover contraception--or any other benefit for that matter. It's pure conjecture to assume what a single-payer system would cover sometime in the future.

Another argument is that although the high court said the case only applies to closely-held companies--in which five or fewer individuals own more than half the stock--that deny contraceptive services, employers may use the decision to deny all kinds of different benefits based on religious beliefs.

In her dissenting opinion, Justice Ruth Bader Ginsburg said the decision was of "startling breadth," since it effectively establishes corporations as having the same rights to religious freedom as individuals.

Likewise, without a definitive definition for what constitutes a religious belief, there are no "practical bounds to employers' ability to pick and choose which laws they will honor," as Los Angeles Times columnist Michael Hiltzik wrote.

If employers start objecting to other insurance benefits, will people covered under traditional employer-based plans revolt against the exclusions? Princeton's Reinhardt thinks so, saying the ruling "may prompt Americans to re-examine whether the traditional, employment-based health insurance that they have become accustomed to is really the ideal platform for health insurance coverage in the 21st century."

Other experts highlighted the fact that Justice Samuel Alito wrote in the majority opinion that the federal government could step in to implement a stopgap measure to ensure women employed by Hobby Lobby and other objecting companies don't go without desired contraception.

Taking that observation a step further, some analysts wondered why, if the justices would allow the government to get involved in delivering health insurance for one type of benefit, wouldn't they support the feds in providing the same accommodations for all employees for all insurance. In other words, isn't it just simpler to eliminate the employer-based insurance system and shift entirely to a single-payer program?

There are certainly pros and cons with each type of insurance market, and I don't know how likely one case will steer the future of an entire  industry. What I do know for sure is I, along with all of the payer organizations, will keep a close eye on how the situation unfolds. - Dina (@HealthPayer)