What if Your Health Insurance Didn’t Depend on Your Job?

Lately, the headlines are full of a familiar old story that we just can’t seem to ever get past: health care costs are still rising, insurance premiums are rising, and Americans feel squeezed from every direction. A recent national survey found that nearly one in four Americans now says the U.S. health care system is in crisis, with high costs usually at the heart of that concern.

And yet, a lot of the way we think about health insurance hasn’t really changed in decades.

Here’s an idea that really deserves another look: what if health insurance in America wasn’t tied to your job in the first place?

A Strange Way to Build a System

It might seem normal to us now, but the fact that most working Americans get coverage through their employer is actually a historical quirk — not a carefully designed policy. Back in World War II, when wage controls limited how companies could compete for labor, employers started offering health benefits as a perk to attract workers. Then, in the 1940s, the IRS ruled that employer contributions to health insurance could be made pre-tax. That gave this whole arrangement a huge boost and made it the default way millions of people get covered. But that historic “accident” has some real consequences.

Today, nearly 150 million Americans have employer-sponsored insurance — and for many families, losing a job also means losing health coverage. That’s a lot of risk and instability tied to something as unpredictable as today’s labor market. It’s not hard to see how this link amplifies anxiety when the economy shifts, or when a company restructures, or when an unexpected illness interrupts work.

Job Lock: More Than Just a Buzzword

Economists call this phenomenon job lock — when people stay in a job they don’t love simply because they don’t want to lose their health coverage. It’s not just theory. Studies show that this lack of portability does reduce job mobility and economic freedom for workers. And that’s not the only downside:

• Employers bear an ever-rising administrative burden trying to manage benefits.
• Workers have little say in what their insurance actually covers — often dictated by plan design decisions made by HR leaders or corporate budget considerations.
• Small employers struggle to compete with big corporations that can negotiate lower premiums due to sheer numbers. Many have trouble even being able to offer a group plan due to minimum participation percentages imposed by insurers.

None of this has anything to do with actual health care — it’s just an ugly side effect of how we built the system.

Costs Keep Climbing

Even with employer plans, Americans are paying more than ever out of pocket. Premiums and deductibles have climbed sharply in recent years, and many delay or skip necessary medical care because of cost concerns.

What Decoupling Might Look Like

Let’s be clear: decoupling insurance from employment doesn’t necessarily require a single-payer system or “government takeover” of health care – so please spare me the political frothing on that, I have no time for it. There are lots of models around the world — from private but regulated insurance marketplaces to mixed public–private systems — that provide coverage without tying it to your job.

Some proposals call for portable insurance, where individuals can take the same coverage from job to job, or approaches that pool all Americans into larger risk pools across state lines to reduce premiums and stabilize markets. Health policy thinkers have suggested variations that keep choice in consumers’ hands while removing the biggest downside of the current setup: losing coverage the day you lose a paycheck.

In practical terms, that could mean:

• State or national exchanges that aren’t just for small businesses or unemployed people.
• Individual plans that are portable from job to job, with portable subsidies tied to income.
• Incentives for employers to contribute to a worker’s insurance without being the gatekeeper of coverage.

A Better Safety Net — And a Better Workforce

Look at what happened during the pandemic: millions of Americans lost jobs — and along with them, their health coverage. That’s the very scenario that reminded many voters and policymakers why this system is fragile – and somehow we’re still in essentially the same place we were 6 years ago on this.

Decoupling coverage from employment would remove one huge stressor in people’s lives. It could also:

• Reduce financial anxiety about unexpected job loss.
• Encourage entrepreneurship and career mobility.
• Align the cost of health care more closely with access and outcomes, rather than employment status.

Conclusion

There are no perfect solutions — every system has trade-offs. But isn’t it worth asking whether tying your family’s health coverage to your boss was ever a good idea to begin with?

And if it wasn’t — maybe it’s time we changed it.