What the free market solution encourages between employers and employees is trust, cooperation, and mutual accountability

Stop me if you’ve heard this one before

writes Carine Martinez-Gouhier.

Texas makes everybody better off by reducing government intervention in their lives. Because of this success, other states emulate the Lone Star state. Then proponents of big government in Washington, D.C. get nervous and start attacking Texans as impractical ideologues that don’t care about workers, the poor, or people in general.

 … [And yet] the benefits of Texas’ approach are undeniable. The solution encourages trust, cooperation, and mutual accountability between employers and employees. Employers that choose to offer a private benefit plan are not relieved from their liability for possible negligence as they would be under the state system. The exposure creates an incentive for the employer to proactively make the workplace safer to prevent as many work-related injuries or illnesses as possible. In exchange, employees are often expected to quickly report injuries so that medical care can start early, as well as facilitate employees’ recoveries and timely returns to work. 

 … The more businesses can compete for employees, the more workers benefit.

Of course, employers benefit too. When employers are free to shop for benefit plans, insurance companies have to compete for employers’ business, which tends to drive prices down. Insurance companies can also offer solutions tailored to an employer’s specific activity, instead of offering an expensive one-size-fits-all solution. Lower costs mean employers can focus on better care for injured workers too and also provide a strong incentive for them to keep workers away from harm. Overall, employers and employees interact far more in nonsubscription than in the state system.

Carine Martinez-Gouhier is a policy analyst and the managing editor of the Center for Economic Freedom at the Texas Public Policy Foundation.