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Wider view on Hobby Lobby ruling

By Jay MacDonald · Bankrate.com
Monday, July 7, 2014
Posted: 1 am ET

The biggest fireworks display of Fourth of July week was ignited by the U.S. Supreme Court, which ruled in Burwell vs. Hobby Lobby that owners of "closely held" businesses may exclude from their employer health plans certain contraceptives that run counter to their religious beliefs.

© Steve Rhodes/Demotix/Corbis

Hobby Lobby is a Christian-owned craft store chain that challenged the contraceptive provision of the Affordable Care Act, saying it violates their religious freedom.

In the week of outrage that followed the court's ruling, civil libertarians, equal rights advocates, gay right groups and others who sense a dangerous precedent echoed the blistering dissent of Justice Ruth Bader Ginsburg, who predicted, "The court, I fear, has ventured into a minefield."

Amid the ensuing pundit pyrotechnics, Princeton University economics professor Uwe Reinhardt offers a broader but no less biting perspective on the ruling in his New YorkTimes op-ed piece. He says the fault does not lie in our views toward religious freedom, gender equality or even birth control, but instead on how we misperceive employer-sponsored health insurance.

Hardly fireworks fare, right? Actually, Reinhardt says that's part of the problem. It should be.

Here's his analogy: You're sitting at a bar, and a pickpocket relieves you of some cash, then buys you a glass of wine. You thank the guy, not realizing you just bought your own drink.

As Reinhardt points out, the premiums "paid" by your employer actually come out of your pocket via a commensurate reduction in your take-home pay. Not only is that pickpocket chardonnay you're sipping, but through the "quasi-parental power" we've bestowed on our employer, you're likely stuck with a choice between generic house red or white.

Which, as Reinhardt points out is not much different from what's available through the single-payer health insurance systems (aka "socialized medicine") in most other countries.

Our "quasi-parental" employer plans come with other baggage as well. "Uniquely in the industrialized world, it has been ephemeral coverage that is lost with the job or changed at the employer's whim," Reinhardt writes. "Furthermore, the arrangement induces employers to intervene in many other ways in their employees' personal lives -- for example, in wellness programs that can range from the benign to annoyingly intrusive, depending on the employers' wishes."

All of which arguably might be worth having the boss involved if it resulted in either cost savings or better health care outcomes. But it doesn't, not by a mile. We spend double what the next industrialized country spends on health care for grades that would land our school children in detention.

The potential upside of the Hobby Lobby ruling, in Reinhardt's estimation, is that by stretching the heretofore narrow parental privileges of our employers, it may open a national dialog on whether employer-sponsored health care "is really the ideal platform for health insurance coverage in the 21st century."

"The case should help puncture the illusion that employer-provided health insurance is an unearned gift bestowed on them by the owners and paid with the owners' money, giving those owners the moral right to dictate the nature of that gift," Reinhardt says.

Here's how employer plans are adapting to Obamacare.

Follow me on Twitter: @omnisaurus

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