David posted three documents leaked by the Senate purporting to be part of the Senate’s “compromise” health care plan. He’s cautiously optimistic about what it means; but I’m pretty sure it doesn’t mean much of anything.
First off, look at the flow chart, 5th row down: You’ll see “new affordable products” for uninsured employees. They might as well have put a little bubble that said “Easter Bunny!” These cheapo insurance deals don’t exist. I’ll gladly be proven wrong on this.
Secondly: Really, really, honestly — do you think that $64 per year per employee is an appropriate amount for non-insuring employers to have to give up? Gosh, that’s $1.23 a week, 3.5 cents an hour for a 35-hour work week — cheapest get-out-of-health-care card ever! Thanks Uncle Trav! As David says, that raises a paltry $7 million. And do you think this has any incentive effect whatsoever? Do you feel good as a taxpayer continuing to pay $213 million+ in health care subsidies to these employers?
DiMasi is absolutely right to stick up for a much higher figure than $64 a year per employee. That’s not a compromise, that’s an insult. I’m all for “cutting the baby in half”-type deals at this late date, but this one is all diaper for taxpayers.
… By the way, as a side note, Health and Human Services Secretary Mike Leavitt has weighed in on the negotiations, saying that expanding health coverage better not actually expand health coverage (at least not through Medicaid). Turns out Mr. Leavitt has trouble telling the truth about other things, which makes me wonder about his current leverage on this deal.
david says
it is not publicly known who leaked the documents. Obviously they came either from the Senate or the House, but we really don’t know which.
stomv says
but on the bright side, once the legislation is in place, it is much easier to raise the number.
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Consider these hypothetical scenarios:
The state budget is in a $20 deficit: raise the tax from $64/yr to $247/yr — still less than a mere $5/week per employee.
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The cost of health care keeps rising, and the free care pool is in trouble: raise the tax from $247/yr to $520/yr : $10 per employee per week. Etc.
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Once it is just a number that needs to be changed, it’s much easier to adjust the numbers.
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Hell… Make it $64, with a clause to go up $10/yr for the next 10 years. That’ll make it $174 in 2016, whereas keeping up with inflation would have only cost $86 or so. Even if you want to use 10% as inflation since health care is increasing faster than other prices, you’re at $166. It’d still be better.
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Hopefully, they’ll be able to get a number higher than $64, and they’ll be able to have that number increase every year to keep up with health care inflation (at the very least!). Even if they only did the latter, I’d feel like the battle was won, and we’re advancing on the war in bite sized increments.
johnb says
Charley, Iâd have to respectfully disagree with your contention in a previous post that introducing a $62 ânon-offeringâ employer tax would entice currently âprovidingâ employers to drop coverage for their employees and pay this nominal fee. As the article that you so wisely pointed out discusses (see Freakonomics re: day care and late pickup fees.) there are other powerful incentives in the world besides economic. Providing insurance to your employees isnât at all like picking up kids from day care (the example in the article). Companies that currently offer insurance to employees due so for a variety of reasons, some of them economic (being able to recruit highly-qualified employees, etc.), but also in response to social and moral incentives. Why would adding a small penalty encourage businesses to drop coverage tomorrow when they can do it for free today? Iâm not buying it.
charley-on-the-mta says
The authors of Freakonomics argue that it’s exactly because this moral issue has been quantified that people feel free to pay instead of act right. But I admit it’s an arguable point.