Re: Health Care and Small Business

Topics: Health
16 Aug 1994

From: ervan

At 03:42 PM 8/16/94 CDT, Dan Dees wrote:
>[WSJ article arguing the arbitrary company size cut-offs are foolish]

Quite true. And when it happens it will be taken not as evidence that
socialism is a failure but that free enterprise cannot provide health care
(as more people are employed where benefits are less). This trick has
already been applied. As it stands, many mandated 'benefits' have a
full-time/part-time distinction. Employers respond by hiring two part-time
employees instead of one full-time. Ah, but listen to the liberals and
you will hear about all of the low quality part-time jobs created in the 80's.
Never mind that it is their fault.

Another aspect of this is that the Mitchell plan is designed to fail. If
employer based coverage doesn't reach 95%, mandates kick in. The small
company cut-off is one way that coverage will be reduced. There are many
additional cost shifting measures that kick in intially (like no exclusions
for pre-existing conditions). All of these make it (more) economically
rational to self-insure. The government counts this as being uninsured.
The Mitchell argument is that 'we will give free enterprise a chance,
but if it fails, we will have to do the right thing.' Meanwhile, he's
sharpening the knives to stab business with.

The Dole alternative is not much better. One of the things in it is
that people cannot be excluded for pre-existing conditions. They are
not excluded now, they are only charged more (where legal, where illegal
they are excluded instead). So, 'no exclusion' actually means insurance
companies cannot charge more (or as much more as it takes). New York
state pooling has seen this disaster. Everyone flees, the state is
left to raise taxes to fill the pool, the truly sick get inferior care.
At the national level, we can expect to see this avoided by forcing everyone
to buy insurance. The natural response will be to sell a minimal policy
to escape the cost shifting. The result will be that the government will
specify a minimum coverage package that everyone must buy. And, it won't
be a rational minimum package, but it will be a minimum package set high
enough that there is sufficient excess cash to cover all of the other
'good things' (like pscyhotherapy & drug rehab for your neighbor's kids).
That's built-in from the very beginning. The whole premise of not being
able to charge for pre-existing conditions is that health insurance
must be made a tool of the redistributionist state. Given that, the
CHP argument of how do we ration and who gets excluded will ensue.
Thus, the Dole plan is no better than the CHP. It just may take a few
more years for all of its ill effects to be felt.

If the Republican party really believes what its leadership is saying,
they are no hope for salvaging medical care.
---Ervan



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