Employers shouldn’t be health care scapegoats
Author: Mike Flynn
Publication Date: April 2006
Newspaper: North County Times
Topics: Health Care
This month, after working together with businesses and economic experts, Massachusetts Gov. Mitt Romney signed legislation mandating that all individuals buy health insurance. The bill sets conditions for a more market-based approach, designed to make insurance more affordable throughout the state.
The road taken by Massachusetts begins from the radical notion that health care is a statewide problem, affecting all citizens, and hence should be dealt with via public policy as opposed to the depressingly prevalent (non) solution of foisting the burden of funding universal health coverage onto employers.
The latter approach takes the form of legislation, often known as a “fair share” bill, mandating that employers pay a certain amount toward coverage for their employees, or else pay the difference directly to the state. The first such law was passed last year in Maryland. By now, about 30 other states have or are currently considering “fair share” legislation.
California actually went down this road two years ago, with Proposition 72, which would have required that all employers with 20 or more employees provide full medical insurance.
Though a seemingly convenient solution, the inefficiencies and astronomical costs of mandated employer-provided health coverage far outweigh any short-term political gain. Prop. 72 would have cost up to $12.9 billion to California businesses and resulted in up to 150,000 lost jobs.
As is often the case, the displaced employees would have most likely been younger, poorer, less educated and disproportionately minorities —- the very people whom health care proposals are most designed to help. Hispanics, who make up 30 percent of the workforce, would have suffered 53 percent of the job losses.
Most troubling, after the great cost in money and jobs, is that the majority of the uninsured would have remained without coverage. Only 31 percent of uninsured Californians would have received new coverage under the program.
Fortunately, California voters wisely —- though narrowly —- defeated the proposition.
While it is useful to pretend that employers somehow represent a unique class of citizens, the truth is that they are as locked into the state economy as anyone else. The costs that they must bear are at best one degree removed from that which will be borne by all the state’s residents, once employers are forced to cut jobs, raise prices or be driven out of business altogether.
There are presently as many as seven competing health care bills under consideration in the California state legislature. In a positive development, only one of those involves mandated employer-provided health coverage. The others all reflect a shift toward seeking a comprehensive statewide solution, rather than a stopgap one driven by political expediency.
The difference between the solutions proposed by Massachusetts and other states to what is really a national issue offers lawmakers throughout the country a choice of paths: take a hand in providing a solution directly, or use employers as a convenient scapegoat. The former may yet succeed; the latter is certain to fail.