Fortune 500 and the Uninsured

Tired of waiting for Congress to agree on how to cover the 43.6 million Americans without health insurance, big business is taking matters into its own hands.

Over 50 Fortune 500 companies - household names like IBM, Ford, Sears, and McDonald's - are banding together to offer health insurance to their part-time workers, contractors, vendors, and retirees under age 65 who are not yet eligible for Medicare.

Their motive is self-serving - to reduce their skyrocketing health costs by thinning the growing ranks of the uninsured, whose burden on the system drives up everyone else's costs.

But so what if self-interest is at work? That's how many social problems are solved in a market economy. The big-business alliance would help solve this one by pooling workers, thus offering them lower insurance rates which they couldn't find as individuals. The alliance estimates it could cover as many as 4 million people - 10 percent of the uninsured.

Business pooling is not a new idea, and it has its own set of problems. One risk is that pools won't attract enough healthy participants, whose low costs offset those of patients requiring much more care. In Washington, the House has passed several bills to pool small-businesses (and it did so again last week), but they've failed in the Senate.

This same challenge faces the Fortune 500 pool. The nonprofit Center for Studying Health System Change suggests the alliance may only net a couple hundred thousand participants. It's not enough to offer discount rates. The premiums must be low enough to be affordable to the healthy working poor - otherwise, they'll continue to stay outside the system.

The alliance believes it can avoid this pitfall by virtue of its size and the simplicity of the plan, which will use only one insurance carrier.

Congress would do well to reinforce the alliance plan by passing something both political parties support: tax credits to help ease individuals' insurance costs. But Big Business is right not to wait for lawmakers to help perfect an already good idea.