Part 6A laid out the three honest paths to fixing this — Medicare for All, a public option, or a Swiss-style regulated multi-payer — and closed by pointing out who else is paying for the current setup besides you and your family: American business. This is that post.
For about twenty-five years I worked at companies that handed me health insurance, and for about twenty-five years I thought of it as a perk. Like the lobby coffee, or the holiday party — something the company generously provided. Then I got laid off in 2021, saw the COBRA quote, and finally understood what I’d been getting the whole time: a leash with a velvet cover on it.
The shorthand version everyone uses — business opposes universal healthcare — is wrong. It’s wrong in a useful way, the way most political shorthand is wrong: it papers over the people getting hurt by the thing they’re supposedly defending. The current system is costing American business well over a trillion dollars a year and getting worse. Most of American business would benefit from fixing it. A specific, identifiable set of business interests is fighting tooth and nail to keep it broken anyway. Let’s walk through which is which.
The trillion-dollar bill
The current system costs American business north of $1.5 trillion a year. That number is built from two documented components, neither of which is in dispute.
The first is the direct cost of providing employer health benefits. The Integrated Benefits Institute, the canonical source for this aggregate, put it at roughly $950 billion in 2020. That number has gone up every year since. The 2025 KFF Employer Health Benefits Survey reports that the average family premium has now hit $26,993 — up 6% over the previous year, the third consecutive year of 6%+ increases, which is the worst stretch in two decades. Single coverage runs $9,325. Multiply across the ~154 million Americans on employer-sponsored insurance and you’re well past a trillion in direct employer outlays alone.
The second is the productivity drag from illness in a workforce that can’t afford to actually use the insurance it has. IBI estimates that costs employers another $575 billion a year — sick days, disability claims, and what the literature calls presenteeism, which is the polite name for people showing up to work sick because they can’t afford not to. That works out to about 60 cents of lost productivity for every dollar spent on benefits.
Add those together and the floor is $1.5 trillion. Update for three more years of 6%+ premium hikes since the IBI figure was published and the real number is north of that. This is conservative arithmetic, not an aggressive estimate.
And it hurts small businesses worse than it hurts large ones, by every measurable dimension.
What this actually costs a small business
For a small business with ten employees offering family coverage at the 2025 KFF average, the employer-side premium tab runs around $200,000 a year. That’s before administrative burden, before broker fees, before the COBRA paperwork, before the compliance overhead (ACA reporting, HIPAA, ERISA), and before any of the hidden costs — like the productivity tax of an owner spending nights and weekends managing benefits decisions instead of running the business.
Per-employee, small businesses are paying somewhere in the $15,000-$21,000 range depending on coverage mix and family size. That’s the lived experience reported by the National Federation of Independent Business — whose own data has had healthcare as the number-one long-term small-business problem every year since 1986. Thirty-nine years. Same answer. NFIB’s 2024 figures: 98% of small employers offering health insurance say the cost will become unsustainable within five to ten years.
The administrative burden adds another five to eight grand a year for a small business — HR time, broker fees, payroll integration, compliance. That’s on top of the premiums. And the turnover cost when employees leave for better benefits adds another layer: Gallup’s research, drawing on SHRM and BLS data, puts the cost of replacing a single employee at 50-200% of their annual salary, depending on role. For a $50,000-a-year worker, that’s $25,000 to $100,000 per replacement. Gallup’s headline finding: voluntary turnover costs U.S. businesses about a trillion dollars a year on its own, separate from any of the healthcare math.
Now the part that doesn’t show up in the headline KFF number — the structural rigging underneath. The 2025 KFF data shows the small-firm experience is worse than the smoothed national average suggests:
| Small firms (10-199) | Large firms (200+) | |
|---|---|---|
| Offer health benefits | 59% | 97% |
| Avg family premium | $26,054 | $27,280 |
| Worker share of family premium | 36% ($8,889) | 23% ($6,227) |
| Avg single deductible | $2,631 | $1,670 |
So a worker at a 25-person company is paying nine grand a year out of pocket for family coverage and walking into a $2,600 deductible before insurance does anything. A worker at a 1,000-person company has the same insurance card but eats $3,000 less on the premium and another $1,000 less on the deductible. That gap — roughly $4,000 a year in real money — is what small businesses mean when they say they can’t compete for talent. They aren’t whining. They’re losing the math.
A 2024 JPMorgan Chase analysis quantified this in a different direction: firms with under $600,000 in annual revenue spend 12% of revenue on health insurance. For firms over $2.4 million, that share drops to 7%. The smaller you are, the bigger the bite — both as a share of revenue and as a share of what the worker actually takes home.
The business that never gets started
The most expensive part of this whole system is the part you can’t see, because it consists of businesses that never form and jobs that never get created.
The economics literature here goes back to Brigitte Madrian’s 1994 paper in the Quarterly Journal of Economics, which established that workers with employer-sponsored health insurance are measurably less likely to switch jobs. The shorthand is job lock. Subsequent work extended the finding to entrepreneurship: Fairlie, Kapur, and Gates (2011, Journal of Health Economics) found that workers without alternative coverage are significantly less likely to leave wage employment to start a business — entrepreneurship lock. Blume-Kohout (2024, ILR Review) used the ACA’s pre-existing-condition protections as a natural experiment and found self-employment rose 1.4-1.8 percentage points among adults with declinable conditions and no spousal coverage — a real effect that faded as the law’s future became politically uncertain.
The Blume-Kohout result is worth pausing on. A 1.4-1.8 point bump from one narrow ACA provision affecting one narrow subset of the population is enormous when you remember that baseline self-employment hovers around 10%. Extrapolating across the broader population from a full universal coverage system, the directional effect is in the range of 20-25% additional business formation. That’s hundreds of thousands of businesses a year that aren’t getting started right now because the founder can’t afford the healthcare gap between leaving a job and getting a startup off the ground.
It’s also the reason small businesses lose talent to large ones — not because the wages are worse but because the benefits gap is so big it would take a 15-20% raise just to make up for it. Which the small business can’t afford. Which is why the small business stays small. Which is why the large business stays dominant. Which is why the whole system bends toward concentration and away from competition.
Healthcare as a worker-control tool
This is the part that explains why some large corporations actively prefer the current system to a universal one — even though it costs them tens or hundreds of millions of dollars a year more than the alternative would. It’s because for them, the cost is not the point. The control is.
Comprehensive health benefits — once you’ve offered them — function as a retention mechanism that has very little to do with the worker liking the job. Employees with chronic conditions, kids with special needs, spouses with pre-existing conditions, or anyone over fifty becomes dependent on the coverage in a way that goes well beyond ordinary attachment to a paycheck. They can’t leave without risking their family’s healthcare. The economics literature has a name for this too. It’s the same job lock the entrepreneurship research describes, just looked at from the employer’s side instead of the worker’s.
It also functions as a wage-suppression mechanism. Every annual review I ever had at a cable network — and I had a lot of them — came around to the same line at some point: we’d love to give you more, but healthcare costs went up again. This was always presented as a fact of nature, like weather. The natural follow-up — well, why are we the only developed country handling healthcare through employment, then? — was not part of the conversation. The healthcare-went-up framing only works because the worker can’t credibly threaten to leave, because leaving means losing the coverage. Take away the coverage as a retention lever and the worker can negotiate on actual wages. Which is precisely what some employers don’t want.
And it functions as a moat against competition. About 67% of covered workers are now in self-funded plans, including 80% of large-firm covered workers (KFF 2025). Self-funding lets large employers absorb risk directly, sidestep insurance-company profit margins, and negotiate hospital networks at scale. It also lets them offer benefits that a small competitor structurally cannot match. The talent flows up, the competitor stays small, the dominance compounds. Universal coverage breaks this entirely — the small firm and the giant firm both get the same healthcare baseline and have to compete on actual job quality. Some large employers find that prospect terrifying, for good reason.
And the largest practitioners of this strategy are not abstract — they are the companies you already know. A 2020 Government Accountability Office report identified Walmart, McDonald’s, Amazon, Dollar Tree, Dollar General, Target, Burger King, FedEx, Wendy’s, Taco Bell, Home Depot, Lowe’s, CVS, and Walgreens as the top employers of working adults on Medicaid and SNAP. Walmart was the number-one employer of Medicaid enrollees in nearly every state surveyed. These corporations are not, in any honest accounting, paying for their workers’ healthcare — the taxpayer is, through a public program — while the corporations themselves simultaneously lobby through PACT and the Chamber against expanding that same program into anything universal. A 2020 analysis commissioned by Senator Bernie Sanders put the total taxpayer subsidy to low-wage workers at large profitable corporations at roughly $153 billion a year. That is the corporate-welfare flip side of the healthcare extraction system — same scheme, viewed from the other end. Walmart isn’t paying for Walmart workers’ healthcare. You are.
The productivity gap
Beyond the direct cost of the insurance, the current system is eating productivity in ways the IBI’s $575 billion figure only partially captures.
Gallup polling has consistently found that around 38-44% of Americans say they’ve skipped or delayed medical care because of cost — a figure that has trended upward over the past decade and is at the high end of that range in the most recent data. People don’t fill prescriptions. People don’t get the diagnostic test. People let the manageable condition turn into the emergency room visit. People show up to work sick because they can’t take the unpaid day off and can’t afford the urgent care copay. The IBI’s productivity-loss estimate is built on observed absenteeism and presenteeism — it doesn’t fully count the surgeries delayed, the chronic conditions left to spiral, or the workforce that aged into preventable disability because preventive care was a luxury good.
Universal coverage in peer countries doesn’t eliminate this entirely — every system has friction — but it shrinks it substantially. The conservative estimate from the available data is that recovering a 5-10% productivity gain from a healthier, accessible-care workforce is realistic. For a 10,000-employee corporation paying $70,000 average wages, that’s $35-70 million a year in recovered output. Across the U.S. economy, the recoverable productivity is in the hundreds of billions of dollars annually.
A 2020 study published in The Lancet estimated that Medicare for All specifically would save the U.S. about $450 billion a year in healthcare expenditure and prevent roughly 68,500 deaths annually. That’s the savings on the healthcare-spending side alone, not counting the productivity recovery. Stack the two together and the macro picture is somewhere in the range of $600-700 billion a year in savings and recovered output — the kind of money that, redirected into wages, R&D, and capital investment, would compound across the economy for decades.
The competitive disadvantage internationally
The cleanest illustration of the international cost gap is still the Big Three. In the mid-2000s, GM spent roughly $1,500 per vehicle on healthcare; Toyota spent about $200. GM said publicly that this gap amounted to a $5 billion competitive disadvantage. They weren’t grandstanding. They were trying — mostly unsuccessfully — to get someone in Washington to notice they were competing against companies whose governments paid for their workers’ MRIs.
That specific per-vehicle number isn’t current — the 2007 UAW VEBA trust restructured the retiree healthcare math, and the active-employee gap has narrowed — but the structural point hasn’t moved. The peer-country comparisons remain stark. German employers pay roughly 7.3% of payroll into the statutory health insurance system, with employees paying a matching share — a fully predictable cost that scales smoothly with wages and includes no broker fees, no enrollment infrastructure, no compliance burden. Japanese employer contributions run around 5% of payroll. Swiss employers can opt into contributions or not, because workers buy their own coverage through a regulated multi-payer system with income-based subsidies. None of these countries have employer-side healthcare costs anywhere near $14,000-$20,000 per employee, because none of them have built their healthcare financing on the back of payroll the way we have.
Every car, plane, hard drive, and pair of shoes coming out of Germany, Japan, Korea, France, Canada, or the U.K. is priced into an economy where the company doesn’t underwrite the workforce’s appendectomies. Ours does. We have built a uniquely expensive system, then handed the bill to the firms that have to sell into a world that didn’t.
Which businesses are loud, and which are quiet
Here is where the shorthand breaks.
The lobbying class — the named coalitions you see in DC — opposes universal coverage in essentially every form it has been proposed. The U.S. Chamber of Commerce, Business Roundtable, National Association of Manufacturers, and Council for Affordable Health Coverage have formed a coalition specifically for this purpose, called PACT (Protecting Americans’ Coverage Together). Their literature describes employer-sponsored insurance as a “cornerstone” of innovation and asks policymakers not to “destabilize” it. Drew Altman, KFF’s CEO, noted in a column accompanying the 2025 survey that employers “have never been meaningful supporters of government cost-containment efforts” — meaning the very people most exposed to the costs have never quite been able to bring themselves to vote for fixing them.
NFIB, which markets itself as the voice of small business, actively lobbies against single-payer in every state where it surfaces. They helped kill California’s AB 1400 in 2022. They’re currently fighting the New York Health Act. Their stated position — published on a page that simultaneously describes healthcare as the worst problem their members have ever reported — is that nothing structural can be done about it. Instead they advocate for Association Health Plans, HSAs, and selling insurance across state lines: the same shelf of small-bore tools that have been on offer since the 1990s and have not, in the period since, moved the headline number even one percentage point in the right direction. Whether NFIB’s rank-and-file members would agree with this strategy, given thirty-nine consecutive years of identical survey results, is a question NFIB has not visibly asked.
The business organizations that do support universal coverage exist, but are smaller and quieter: Main Street Alliance, Small Business Majority, Physicians for a National Health Program. They tend to represent firms that aren’t part of the Chamber’s donor base. Polling of actual small-business owners (as opposed to the lobbying organizations that claim to speak for them) consistently shows majority support for universal coverage in some form, because the people running these businesses can see the math.
So when the political-media shorthand says business opposes universal healthcare, what it actually means is: a specific set of lobbying organizations, funded by a specific set of large dues-paying members, opposes it. That set has three identifiable interests in keeping the system as-is.
The first is the insurance industry itself, whose $743.9 million 2024 lobbying bill is the diagnosis I already walked through in Part 5. The second is the segment of large self-insured employers — about 80% of large-firm covered workers are now in self-funded plans — for whom benefits function as a retention moat and a competitive barrier as much as a benefit. The third is the ideological lobby class (Heritage, the Cato Institute, the Chamber’s policy arm) whose actual constituency is donors rather than members.
And the desperate constituency — the small business owners actually drowning in this, the ones whose own surveys have ranked healthcare #1 for almost forty straight years — is represented in Washington mostly by an organization that lobbies in the opposite direction of its members’ stated interest.
One last thing worth saying plainly. The people defending the current system in the name of free enterprise are defending the opposite of free enterprise. A market in which a twenty-five-person company cannot compete with a twenty-five-thousand-person company for talent because the benefits gap is structural rather than performance-based is not a free market. A labor market in which workers cannot leave their jobs without risking their family’s healthcare is not a free market. An economy in which a substantial share of potential businesses never form because the founder can’t bridge a coverage gap is not a free market. The current arrangement protects incumbents, suppresses competition, throttles labor mobility, and quietly routes a chunk of large-corporation labor costs onto the public balance sheet. Every one of those features is the opposite of what free market is supposed to mean. The people defending it know this. They just count on you not noticing.
The bottom line
If you took every American employer and asked them honestly whether they’d prefer to keep doing this themselves or hand the whole problem to a public system at lower cost, the median answer would be obvious. The median small business owner has been begging for relief for forty years. A serious chunk of the median large employer would happily route the savings into wages, R&D, dividends, or just literally anything that isn’t a benefits department.
The fact that it doesn’t happen anyway isn’t because business opposes the fix. It’s because the specific interests that pay for the lobbying don’t want it, and the specific interests that would benefit from it have never built lobbying infrastructure of remotely comparable size. The insurance industry has spent forty years and tens of billions of dollars convincing Americans — and the businesses that employ them — that the only alternative to the current extraction is something worse. It isn’t true. It has never been true. Every peer country we compete with handles this differently, at lower cost, with better outcomes, and with their businesses freer to actually do business.
Healthcare is the most legible engineered scam in this series — every number is reported, every dollar is tracked, the productivity loss is measured to the billion. It is not the only system that has been built this way. Next up: housing. Zoning, NIMBYism, private equity buying up single-family homes one block at a time, and the slow conversion of the most basic form of American household wealth into an asset class held by the people who already have all the other assets. Part 7.
Even that's Odd 
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