Employee’s “Pay Raise” and Healthcare Contribution

It is hard to disagree with the statement that Americans’ wages stagnate due to the rising healthcare costs to a considerable extent. The current financial constraints make companies reduce their costs. It is also obvious that employers have to pay higher fees to insurers due to the increasing healthcare package prices in order to secure the social benefits provided to employees. Hence, instead of paying higher wages, these additional funds are allocated to pay for health insurance.

Buchmueller and Valletta state that employers face significant challenges in meeting the existing standards regarding the provision of health insurance and health-related benefits (workplace wellness programs). It is also found that some employees are dissatisfied with such trends, and there is a growing concern regarding the effectiveness of this system. Some people are willing to get higher wages and be able to make decisions regarding their healthcare options on their own.

As mentioned above, the fee-for-service model has become ineffective due to health-related organizations’ focus on revenues rather than public health and prevention, which are the major goals for any country’s healthcare system. Health-related organizations provide more services at higher prices, and employers have to buy packages, which has a serious impact on their competitiveness. Employees expect to have a good health insurance package, as well as a set of wellness benefits that have become required or accepted by the public. The only way to keep the balance is to allocate funds so that health-related expenses are addressed, but no money is left to increase employees’ salaries.

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