* Employer Mandates in health reform & tobacco
Topics: Health, Subsidy
22 Jun 1994
From: ervan
Tonight on MacNeil/Lehrer they interviewed their favorite set of five freshman
representatives on the various health care reform packages. The unreality of the
whole debate is amazing.
Much of it seems to revolve around employer mandates. The argument is employees
need a break versus small business needs a break. That's perfectly silly.
Employer mandates do nothing but force the employee to buy some particular thing
(in this case government health care). That the employer has to handle the
paperwork and then lie about real wages does not change the reality of a given
worker only producing some fixed amount. The irony is that the Dems claim they
interested in helping the working poor but the effect of these proposals is to
force currently uninsured people to but health insurance. People that are
currently uninsured are young workers (the poor and the old are already covered),
some poor, some not. The latter group are reasonably self-insured. The prior
group have decided that the benefit of insurance is less than its cost. That's
rational under the cirumstances. The great health care reform would simply lower
their incomes still further! The second irony is that 'community rating' further
exacerbates the problem. The same working poor who are now self-insured will
be required not only to buy insurance for themselves they don't want but
furthermore be required to pay the health care bills of the relatively richer,
but sick.
The other claim I love is the Dems who say they won't support any bill that does
not include universal coverage. This is truly a canard. There is no such thing
as universal coverage. There are some people getting some treatments. One could
argue for universal measles vaccination and have something well defined. But
real universal coverage implies expending more resources that we have to try and
treat all of the disease that's out there. The only question is what doesn't get
treated? By giving everyone some treatment for some things, we deny to others
treatment they would have had. The questions are who and why? 'Universal
Coverage' is a euphimism for rationing. For anyone that still has any doubts
about this, I'll repeat by favorite factoid: there are no lithotripters in
Canada. You get to enjoy the socialist fun of passing those stones! The best
that could be made of this mess would be to simply give the 'needy' insurance
vouchers, but nothing that rational is going to happen. The votes that can be
bought with the aristocracy of pull in all those regulations is too much of a
temptation to pass up.
The above is too optimistic in any case, even focusing on a single treatment,
universal coverage implies that there is no demand elasticity, i.e. the demand is
insensitive to the price. Therefore, the price will go up. Of course that won't
happen because the government will impose price controls. The best that can be
said for Clinton is that he already realized where his plan will fail and price
controls are built-in from the very beginning. I've already argued what a mess
that will make of things.
---------------
In Senate hearings on Monday, a representative of the tobacco industry asked
Hillary why not tax Cholesterol [medically bogus in terms of food consumed],
salt, sugar, & alcohol since they are destructive like tobacco? Hillary replied
that if someone would propose a mechanism for doing so she would be open to that
as a fine idea. Blech!
This is disingenuous of course. There are mechanisms available for taxing those
things just as surely as there is for any excise tax. The problem of course is
rather the same one the gun control lobby has: if they told the truth about what
they want, they would never get the first step.
There is something else interesting here. This is all sold under the rubric of
making smokers (or drinkers or eaters or whatever) responsible for their actions.
Ha ha! If you want to make people responsible for their own actions, let them
pay their own bills, i.e. get government out of it. That's not an option of
course. This has nothing to do with making people responsible. It has
everything thing to do with political patronage and power. The people that are
being taxed are the ones who are perceived as being 'sinners' and are in the
minority. It is pure tyranny of the majority. That it may have some incidental
relation to real risk is hardly more than a coincidence of the moment. In any
case, the tax rate does not come anywhere near reflecting the real cost imposed
by these various activities; it's merely a political football. I still remember
hearing Mike Andrews say "It's time to raise the liquor tax again. It's been
about 10 years.". Well, duh. As for the objection that a majority of people
drink and therefore it's not tyranny of the majority, I would say that the people
whom the tax really falls on are in the minority, even though most people are
touched by it some slight degree. There is a 'system' realization that paying a
little more alcohol tax when someone else pays the most of it avoids a higher
income tax (or whatever). And sure enough, excise taxes screw the poor
disproportionally. The Dems have no interest in helping the poor, just more
bullshit.
Even if the tobacco tax were made equal to the health care costs of smokers, it
still wouldn't be fair because many smokers already have private insurance and
they would pay twice. To the extent that there are different kinds of smokers
and different ancilliary risks, the relatively careful are forced to subsidize
the more careless. And just a little fact, not that they have much relevance to
the debate it seems, smokers already pay more in tobacco taxes than they extract
in health care costs.
---Ervan
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