OPINION: FOUR KEY THINGS YOU SHOULD KNOW ABOUT HEALTHCARE

Health care, so far perhaps the biggest issue in the Democratic primary, is also the most complicated issue facing government and the public. Unfortunately the debate is filled with persistent misconceptions, from the role insurance company profits play in health care costs to who is actually paying for workers’ health coverage.

Clarifying four fundamental health care fallacies could make it easier for voters to square some of the Democratic proposals — and their critiques — with reality:

Fallacy No. 1: Employers pay for employees’ health insurance.

Employers write checks that cover most health insurance premiums for employees and their dependents. But as the Princeton health economist Uwe Reinhardt once explained, employer-sponsored insurance is like a pickpocket taking money out of your wallet at a bar and buying you a drink. You appreciate the cocktail until you realize you paid for it yourself.

With health coverage, employers write the check to the insurer, but employees bear the cost of the premium — the entire premium, not just the portion listed as their contribution on their pay stub. The premium money that goes to the insurance company is cash that employers would otherwise deposit in employees’ accounts like the rest of their salary.

The fallacy is in thinking an employer’s contribution comes out of profits. In fact, higher health insurance premiums mean lower wages for workers. Since 1999, health insurance premiums have increased 147 percent and employer profits have increased 148 percent. But in that time, average wages have hardly moved, increasing just 7 percent. Clearly workers’ wages, not corporate profits, have been paying for higher health insurance premiums.