While the House health care reform bill is the one favored by progressives, it also happens to be more small “c” conservative than that Senate bill. This is not about the public option, the size of government subsidies, or regulation. The House bill is more small “c” conservative because it would do a better job of maintaining a health care system similar to the one we currently have. The reason for this is the employer mandate.
The House bill has a mandate that large businesses provide their employees health insurance or face a penalty. For large businesses, the penalty for not providing health insurance is 8% of payroll. That is a serious penalty. Employers would also now have a new and very easy way to give their employees “employer-provided health insurance.” They would be able to simply provide their employees with vouchers to use toward the purchase of any plan they wanted on the new exchange.
The ease of providing insurance, the size of the penalty, and the tax-free status of employer-provided health benefits combine to create little financial incentive for companies to stop providing health insurance. I suspect if the House bill were to become law, we would still have a health insurance system built primarily on employer provided and funded health insurance for years to come. This lack of radical change is what makes the bill so small “c” conservative.
The Senate bill does not have an employer mandate. It has a very weak modification of the “free rider” provision. In practice, if a large company decided to stop providing health insurance, they would face only a $750 per employee fine. This is a pittance compared to the House's employer mandate, or the cost of providing health insurance.
If reform works properly and everyone is able to get decent, relatively affordable health insurance on the new exchange (this a big "if," given how poorly the reform bill is designed), businesses are going to start rethinking why they are providing incredibly expensive health insurance. Why keep paying for your employees health care if the government will help make sure they get health insurance anyway?
I can easily picture a mass dropping of employer-provided health insurance in the future if the Senate bill becomes law. It will not happen right away. Businesses are still stuck in their old ways, and no one really knows if the exchange will work. But during the next economic downturn, the cost-cutting solution by businesses might be a massive dropping of health insurance benefits instead of massive layoffs. Because the Senate bill has the serious potential to undermine our current employer provided and funded health insurance system, the Senate version is the truly radical bill.
I'm no defender of employer-provided health insurance--I want to see it eliminated--but passing a bill that will encourage its collapse without a real plan to replace it in a fiscally sound manner seems like pure madness. (And it is going to be a real fight when Congress needs to pick up the pieces.) Big business doesn't want to be forced to provide their employees health insurance, but also doesn't want the country to move away from the employer-provided health care system. It is a schizophrenic catch-22. The House bill would at least encourage us to gradually move from an employer-selected insurance system to simply an employer-funded insurance system (like many industrialized nations).
While Senators like to claim their bill is more “moderate,” in reality, they are refusing to adopt the most small “c” conservative health care reform idea: a strong employer mandate. The Senate also expands insurance coverage 12% less cost effectively than the House bill. The Senate bill is not more moderate, it is only more beholden to wishes of big business.
No comments:
Post a Comment