There’s a school of thought that says when enemies suddenly become friends — watch out!
Senate Democrats have announced their proposal for a health insurance plan — and Wal-Mart is endorsing it. To hear the Left tell the story these last few years, Wal-Mart is the Great Satan of American commerce, abusing its employees with substandard working conditions, and crushing small, local businesses out of existence. So why are they suddenly on the same side?
First of all, let me emphasize that our current health care system is a mess, but not for the reason that most people assume. What makes it a disaster isn’t the 46 million uninsured. The vast majority of them, if something bad happens, will get medical care. It may be in an emergency room (which is expensive). It may drive them into bankruptcy (bad for them, and not good for the insured patients on whom the hospital will eventually shift the unrecoverable costs). But few people are actually dying in America because they don’t get medical care. It’s just a profoundly inefficient system.
Right now, I’m on a COBRA continuation health insurance plan. But by May of 2010, that’s going to expire, and I have no expectation of ever finding a permanent job with benefits. (I’m over 50, and because I make my living as a software engineer, that means I can only work contract jobs. No permanent jobs are available.)
Not surprisingly, I think that there is going to be a need for the government to be an insurer of last resort, for those who are unemployed and those who, like myself, are unable to find permanent employment.
What concerns me about Wal-Mart’s endorsement of a plan that requires employers to provide “affordable” health insurance coverage is that it will do something that Wal-Mart would never directly admit to doing. It will drive their smaller, less efficient competitors out of business. There are a lot of mom and pop operations — and some that are their own small, regional chain stores — that are struggling to stay afloat right now. This new requirement will cause at least some of them to throw in the towel.
The Democrats are fast turning into the party of Birkenstock-wearing fascism, pretending to be concerned for the little guy, while consolidating small and medium business into a small number of large, politically connected mega-corporations. (And yes, Mussolini’s Fascist Party and Hitler’s National Socialist Party used the excuse of helping the little guy to justify consolidation. It is no coincidence that the 1932 Nazi Party campaign slogan was “Common needs before individual needs.”)
Now, you might make the case that providing health insurance to the vast number of retail workers who are lucky to make $12 per hour is well worth the loss of a lot of America’s small businesses. I suppose if this were the only choice, there might be some merit to this argument. But this is not our only choice.
There are three big problems confronting these small, often struggling businesses when it comes to providing health insurance. The workers don’t make enough to pay for their own health insurance. The businesses aren’t profitable enough to pay for employee health insurance. Finally, the employers aren’t large enough to form adequate employee insurance pools to spread risk.
I know of an employer with less than 50 employees whose health insurance premiums rose more than 50% in a single year because two covered persons had extraordinary medical bills (more than $100,000). That’s an atypical year, but the consequence of this statistically unusual situation in a small pool has been devastating.
There are significant regulatory obstacles in the way of creating the larger pools that would allow trade associations and other organizations to create nationally based association health plans of a size that could be competitive with the health insurance provided by large corporations and trade unions. And of course, that’s one of the reasons why trade unions, large corporations, and health insurance companies would prefer that this not change.
Here’s a change that wouldn’t cost the federal government a penny in taxes, wouldn’t burden existing small businesses, and wouldn’t increase governmental control.
I do not expect this to solve the problem of the uninsured all by itself, but I would be surprised if it didn’t knock insurance costs down enough to provide private insurance for at least a few million of the currently uninsured. Remember that many small business owners currently have their own individual health insurance plans; if they could join a group health insurance plan with their employees, it would probably save the owner a bit of money, too.
I am not happy about the government being in the insurance business. The right financial arrangement is to charge premiums that reflect actual costs, which will likely be competitive with private group health insurance plans of similar size. Remember that this will be a pool of 30-40 million people, many of them young people. A fair number in this pool will not be able to afford to pay the full premium costs. Some tax credit scheme to provide a sliding scale of assistance is inevitable. While I’m not thrilled with the redistribution of wealth that this involves, it’s better than crushing small businesses — as the Democrat/Wal-Mart coalition seems intent on doing.