Paul Krugman explains why employer-based healthcare is decreasing.

Question: Are we approaching a healthcare crisis?

Paul Krugman: Oh we’re in crisis.  The . . .  You know for working age Americans, employer-based healthcare is the . . . pretty much the only available option.  Individual market for very well understood reasons is extremely expensive and not available to most people.  Employer-based insurance is in rapid decline.  It’s falling off sharply, and it . . .  When the number of the fraction of workers with employer coverage declined early in this decade, people could say, “Well that was the recession.”  But even as the economy recovered, coverage continued to decline.  Rising healthcare costs are leading to more and more employers dropping coverage for their workers, or making the coverage worse so workers have high deductibles, have maximum payments.  So a large number of people who are insured are actually still underinsured.  This is a crisis.  We’re . . .  We had a problem even before.  Even in 1999 in the boom economy, a lot of people didn’t have adequate health insurance.  But now it’s much worse, and there’s no sign that it’s going to heal itself spontaneously.  So no, we need to do something.In a world without politics, I’d say Medicare for all.  Just a . . . have a system that . . . where people pay payroll taxes instead of insurance premiums, and they’d end up paying less, and they’d have coverage because Medicare is a much more efficient system than private insurance.  Overhead is three percent compared with 14 percent for private insurance companies.  Because private insurance companies spent a lot of money trying to figure out . . . basically trying to exclude high cost clients and marketing.  And all of these things . . .  And Medicare which just covers you if you’re 65 or over – end of story – doesn’t have . . . doesn’t spend all that money.

Question: What’s stopping us?

Paul Krugman: There are reasons why that’s hard to do.  Any kind of reform will be bitterly opposed by the insurance companies, and that’s a given.  It would be bitterly opposed by the drug companies.  That’s a given.  But there are other things if you went right away to Medicare for all, first of all you’d have to have a large tax increase.  And while it would take the place of premiums, it would save people money.  That might be a little hard to explain.  It might be . . . it would certainly be hard to pass the legislation.  Also it would mean that people would have to give up the insurance coverage they now have, and many people are happy with their insurance coverage.  So I’m actually all for a (51:08) gradualist, hybrid approach where you regulate the private insurers, don’t allow them to discriminate on the basis of medical history.  You subsidize people who can’t afford insurance so they can afford it.  And crucially, you have a public plan that people can buy into so they don’t have to go to the private insurance companies.  And what do you know?  All of the leading contenders for the democratic nomination are proposing a plan along those lines.  So it’s not perfect.  It’s not what I would do if I . . . if I was dictator; but it’s actually, I think, politically feasible and it’s fine.