Sharon Williams, a management consultant who took over as president of the University of Michigan Health Plan as it wound down, thinks there is one imperative for tackling healthcare costs.
“We will not be able to appropriately address cost until we uncouple healthcare from employment,” she said at the Becker’s Spring 2026 Payer Issues Roundtable in Chicago.
A December survey from Talker Research, on behalf of Oscar Health, found health insurance is a top factor for Americans considering a career move.
Still, one factor driving Ms. Williams’ argument is fragmented risk adjustment pools. ACA risk pools fluctuate as people enter and exit, she said. Changes in employment status further contribute to this fragmentation. There could be more stability with a broader risk pool instead of smaller, more volatile ones.
At the same time, Ms. Williams clarified that she was not advocating for a single-payer system.
“That’s absolutely ridiculous because this country doesn’t have infrastructure, but we do have a way to provide cradle-to-grave coverage,” she said.
Becker’s also spoke with Zack Cooper, PhD, an associate professor of public health and economics at New Haven, Conn.-based Yale University. He said premiums for a family of four with employer-sponsored health insurance are about $27,000 per year.
“You’ve got families, in a sense, buying a new car’s worth of health insurance every year,” he said.
Dr. Cooper’s research points to how employer-sponsored health insurance drives income inequality and puts disproportionate pressure on lower-wage workers, as well.
“Insurance premiums are largely the leading driver of income inequality in the U.S.,” Dr. Cooper said. “Wages vary a whole lot inside companies. Insurance premiums don’t.”
For example, he said someone working in the mailroom could make a fraction of a CEO’s pay. If a 10% increase in insurance premiums takes place — and health insurance is a much greater share of the mailroom worker’s compensation relative to the CEO’s — an employer may not be as inclined to retain that employee.
“When healthcare spending goes up, the effects of it — the job losses we see — are actually concentrated among lower-income workers,” he said.
The origin of employer-sponsored health insurance
Dr. Cooper called the rise of employer-sponsored insurance “a historical accident.”
“Nobody would design it this way,” he said. “It’s the largest exclusion in the tax code, and it creates all these distortions.”
Following a World War II-era wage freeze that opened the door to employer-sponsored health insurance as a recruitment incentive, the 1950s set the stage for taxes not applying to health plan contributions.
Why now?
Ms. Williams thinks pressure to separate health insurance from employment will continue mounting as workers seek untraditional employment arrangements.
“You have a number of people who don’t want to work the nine-to-five job with insurance. They want to work the gig economy,” she said.
Dr. Cooper said if the gig economy gains traction, more people will look toward exchanges. At the same time, some health insurers have been backing off of their ACA products.
“If you’re making money through the gig economy, you are having to pay taxes on that money and buy health insurance,” Dr. Cooper said. “The question is: Who do we subsidize and how?”
Ms. Williams also said that AI will only “speed up unemployment,” perhaps serving as another indicator to look beyond employer-sponsored insurance.
However, Dr. Cooper said there is still a lot of uncertainty around how AI could factor into the equation. A March report from Anthropic said that since late 2022, there has not been a systematic rise in unemployment for workers with high AI exposure. The report did indicate that some occupations could be more susceptible to AI assuming tasks, but much of that potential has not been reached yet.
What could ‘uncoupling’ look like?
Dr. Cooper provided a few ideas: a tax exclusion rollback, employers giving tax-free dollars for purchasing health insurance and further ACA subsidies. The “Cadillac tax” proposed in the ACA was one way of addressing the tax exclusion.
Dr. Cooper said, over the medium term, more people could enter the individual market and be open-minded to narrower networks. A demand for lower-premium products across a more price-sensitive population could “drive insurers to innovate.”
However, Ms. Williams expressed concern regarding whether a functional marketplace exists today.
“You can’t just give people money and tell them to go out and buy healthcare in this current system with its current complexities,” she said.
Dr. Cooper also said the provider market is behind steeper healthcare premiums, so addressing the cost of care does not simply come down to insurance. As healthcare costs rise, the moment for change could be upon us.
“Every … 10 to 20 years, you get big healthcare reform in the U.S.,” Dr. Cooper said. “We’re starting to age up to that right now.”
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