Joblock -- America's New Epidemic

American workers are apparently a very restless bunch. There could be a political upheaval if Washington doesn't act quickly to guarantee health insurance to all, regardless of who employs them.

That's the gist of a hysterical (in two senses) Reuters story this week concluding that "healthcare costs handcuff entrepreneurs."

The bottom line is that as more than three of four insured workers are chained to their cubicles, the victims of job lock that keeps them unhappily employed because they fear the loss of insurance coverage. At minimum, the figure is only one in three, depending on which uncited study you choose to rely on.

This could be big news for forces that want to cut the tie between employment and health coverage -- a disparate group including those on the right who thinks families should view the selection of insurance as not unlike a jaunt to Best Buy to select a new television and those on the left who think the government should provide coverage to all.

Perhaps this is yet another harmonic convergence of the political extremes.

The story didn't get the play it deserves because it is somewhat subtle. It summarizes studies indicating that 20% -50% of workers are inhibited by job lock. These numbers strike me as astoundingly high, but they understate the magnitude of the purported problem.

That's because less than two-thirds of workers are covered by employer-purchased insurance (the government estimated that 64% of those working for big firms get it and figures are likely lower at smaller firms).

When you mash those figures together (multiplying after assuming that only those with coverage worry about job lock inasmuch as the others have nothing to lose), it appears that the minimum number of the incarcerated is 31% of the covered population and the maximum is 78%. That's a whole lot of handcuffs subverting a potential entrepreneurial explosion.

Things may have moderated a bit as unemployment rises. On the other hand, if health reform permitted these people to leave their current positions, it could create enough new openings to eliminate unemployment entirely. Perhaps we could even use the money now wasted on unemployment checks to subsidize health insurance instead.

It is also worth mentioning that nearly all of these incipient entrepreneurs could quit and continue their current coverage for more than a year -- seemingly an optimal outcome -- if they simply elected to pay the premiums as the COBRA program permits them to do. Of course, that doesn't guarantee the ability to continue coverage five years out, but there's an equal risk that they won't still have their job by then in any event. The average time spent on the job hovers around five years.

If you believe these numbers, we're on the cusp of a political revolution if Congress fails to enact legislation that will quickly provide non-job-related coverage to every American. But few politicians believe these numbers. I don't either.