Free Markets, Free People

More Health Care Lies

I don’t use the “L” word very often but in this case it seems completely appropriate.

The question:

Would a government-run health plan upend the employer-based health insurance system used by 160 million Americans?

The Democrats claim the answer is ‘no’.

Here’s their rationalization:

Sens. Edward Kennedy, D-Mass., and Chris Dodd, D-Conn., say their plan would preserve employer-sponsored insurance coverage and create an affordable public option for those who need it.

“The … bill virtually eliminates the dropping of currently covered employees from employer-sponsored health plans,” Kennedy and Dodd said in a letter to members of the Health Committee, one of two Senate groups working on health reform.

The bill includes a “pay or play” provision that would require employers to provide adequate coverage for their workers or subsidize a system that will.

“Pay or play” would require companies to pay the government $750 per full-time worker per year ($375 for part-timers) if they don’t offer health coverage, or if they offer “qualified” coverage but pay less than 60% of workers’ premiums. Small businesses that employ fewer than 25 workers would be exempt.

The Congressional Budget Office, which analyzed the legislation, estimated that by 2019 the same number of workers would be covered by employer-based plans as would otherwise be the case under the current system.

“It tracks what we’re seeing in Massachusetts,” a senior Democratic aide on the Senate Health Committee said on a conference call with reporters.

I’ve put the lie in bold. Why is it a lie? Anyone out there have a $750 a year health care plan? Anyone? I don’t know of a plan for an individual that costs only $750. If there is, then there’d be no reason for any of this nonsense would there?

And Kennedy and Dodd (and the Democrats), the supposed “experts” on health care know that very well. This is pure disingenuousness on their part. This is a blatant attempt to launch a lie to get them past a very important sticking point in the public perception of the bill.

But the average – average – individual health care insurance cost in the US is almost $4,000. And then there’s the cost of administering it.

Hypothetical – you employ 100 people. Let’s say your company pays full health care coverage at the national average (for simplicity sake, assume they all have individual policies). You have two people who administer the coverage at $35,000 each. Your total cost each year to cover your employees is $470,000.

If you pay the federal government $750 per employee a year, your total cost is $75,000. But you can let the two people you’ve had administering your health care program go, saving $71,500 (includes -$1,500 for 2 less employees). Total cost of “pay or play” for you? $3,500 the first year ($73,500 vs. $470,000 every year afterward). In reality, however, it is a net savings of $466,500. You don’t have to be a very good businessman to figure out that one do you?

And remember – these figures only involve “individual” coverage. Family coverage is much more costly, but I see nothing from our two Senate experts which even addresses that. So obviously, the cost of the health care of 100 employees could be vastly more than my simplified example.

No wonder we see corporations coming out now to back this sort of a program. For the vast majority of them, $750 per employee is a huge savings not to mention getting them out of the health care provision and administration business. They’ll pay it gladly. If you like your doctor or your plan, tough beans. You’re going on the government plan. And, of course, the administration will be more than happy to blame your problem on “greedy corporations.”

When they do, just consider the lie and the incentive it provides and then lay the blame precisely where it belongs. Not that it will do you any good where it concerns your present doctor and plan.

Just another step along the road to single-payer brought to you by two lying Senators and backed by the CBO.

~McQ

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17 Responses to More Health Care Lies

  • I agree. The costs for health insurance could be much higher. I pay for myself and wife $14,000 per year. What businessperson wouldn’t rid themselves of such costs. All it would take is a few businesses taking the plunge by having the courage to not worry about competitive wage/benefit structures and the other businesses would jump in also.
    Of course in the long run the costs will return to present levels and go beyond as the inefficient bureauacy takes over and the politicans play their games. But then it will be called taxes not insurance preminums.

  • I hope against hope that after the crap and trade bill, they will literally run out of political steam and cannot get this monstrosity passed.  Life is going to suck a whole lot if my wife and I lose our good coverage and have to pay twice as much for a lesser program.

  • When I was an independent contractor, I paid about 750 bucks a year for health insurance. It had such a large annual deductible that it never paid a dime.
    But most Americans want someone else to pay all their medical bills. That costs much more than 750 bucks.

  • I’m pretty lucky: my employer pays 100% of my health care premiums for very good coverage.  I’m really not looking forward to losing that so that Uncle Sugar can give mediocre health care to some deadbeat.

  • I can understand a company wanting to get out of the administrative mess of health care but I find it hard to believe any knowledgable owner/board would think the $750 premium is going to stay at that rate for more then a year or two after implemantion.

  • I can’t understand that the same people who have such a problem with how the VA and Tricare are run (both gov healthcare programs) want the same government to do the same thing on a much larger scale.

    I don’t think I will every understand them.

  • They mean $750/month, right?  That must be a typo or something…    /sarc

  • I love the idea of government health care. I am a young, suicidal Trotskyite goofball with a closet full of Che T-shirts (no guns, they’re dangerous) and a trust fund. Bring it on baby. Peace and love.

  • 50 million  people do not have healthcare in America. Canada pays virtually 1 percent more taxes than America, and everyone has adequate health coverage. I couldn’t care less if a bunch of greedy rich people in America have to sacrifice their “great” coverage for something that is mediocre, if it means that the 50 million people without it will get it. I believe in the right to life, unlike evil conservative bigots who think that minorities should be kept in slums without any of the beneifts that the rich whites get.

    • That was an exceptionally dumb comment, Peter.  First, the 50 million is quite misleading.  Are you advocating the 12 million or so illegal aliens be covered by the taxpayers?  How about the people who are already eligible for a government program that do not take advantage of it.  Are you counting those who purposely do not take a health care policy.  Are you going to take that choice away?
      Once we get down to a real count of people who want health insurance and are in the country legally, you get somewhere around 10-15 million people.  Now, who in their right mind would upend a system that works, works well, and works quickly, for an inferior system whose major objective would be to provide coverage for the 5% who don’t already have it.  That is like tearing down your house because you want to move on interior wall.  There are better ways to meet the objective.  However, if you want the government to plan your funeral as well as your life, go for it.
      Rick

    • Oh, and from this story:
      http://www.winnipegfreepress.com/opinion/westview/average-canadian-to-pay-37700-in-taxes-this-year-47296992.html
      The average Canadian spends $37,700 in taxes or 42.6% of income.
       
      According to TaxProf:
      The US tax burden as a % of GNP is 28%.  Canada is 33.3%.  So, how do you get that 1%?
       
      Rick

    • For the umpteenth time;

      HEALTH INSURANCE IS NOT THE SAME AS HEALTH CARE.

      Some folks actually pay for their health CARE themselves, with cash, just like the olden days.

  • The idea of government health care is no doubt very good.now i am also going to take some kind of health insurance.

  • I bet all the boys down at Starbucks really love your Che tee — it goes with your goatee and iPhone and shows you really understand the “working class.”

  • That $750 is an annual payment right? Not a one time payment. So what happens two years into the program when the $750 goes to $7500? This looks suspiciously like those teaser interest rates that were used in home mortgages and credit cards.

  • In Massachusetts, employers with more than 10 employees who don’t provide coverage must pay a $295 payment per full-time employee per year. No typo – this is an annual payment. Also, all adults must have coverage, or pay a assessment on their taxes. The individual penalty is roughly half the cost of the cheapest plan available.
    People predicted that the plan would lead to employers dropping coverage, since of course it’s cheaper to pay $295 per year than to cover workers.
    However, the opposite happened. Employer-offered coverage held steady, while in the rest of the country employer coverage went down. Employee take-up rates increased, significantly. The plan strengthened employer-provided coverage.
    The Senate plan for a $750 annual assessment on firms not providing coverage, plus an individual mandate, plus insurance reforms to make coverage available to everyone (no charging more for sick people, or excluding pre-existing conditions), plus sliding-scale assistance for poor people, mirrors the Massachusetts plan.
    Employer groups have been very supportive of the Massachusetts law. Almost every Republican in the legislature voted for it, and of course Mitt Romney conceived of the plan (he did oppose the employer requirement, to be fair). It’s working well, and provides a model for the nation.
     

    • There are two very good reasons Mass hasn’t seen such a change that won’t apply should a national plan be passed:

      For one thing, the state’s fee is not the most onerous provision for companies. Employers must also assume part of the cost of the uncompensated care for workers who can’t afford their health bill. Given how quickly a hospital stay can add up, that may be the strongest incentive for businesses to keep their coverage intact, Fronstin notes.

      Another reason, he said, is that companies that operate in many states often try to provide uniform coverage for their workforce. So they’re unlikely to drop coverage in just one state. If the fee applies nationally the story may be different.