The Globe’s op-ed page neatly runs down the implications of Wal-Mart & Friends’ recent calls for universal health care, with this bottom line: It’s going to take more government involvement, and therefore more tax money.
It’s fascinating to see the calls for reform going in two completely different directions: One towards supposedly more employer responsibility through a Massachusetts-style system, as demonstrated in John Edwards’ plan and separately, Sen. Ron Wyden’s plan; and the inevitable endgame of business, which is to externalize the cost of health care entirely. I don’t think Wal-Mart wants a “play or pay”, in the end.
So the question is whether business interests — and individuals — are willing to pay somewhat higher taxes in return for a bigger government role and hopefully, a break in premiums and real universality. It would make good sense for any business to stop paying x in health insurance in exchange for paying x-1 in health-related taxes. But Wal-Mart didn’t get to where it is by leaving money on the table: You know that eventually, they don’t want to pay for it at all.
So far, the success of the Massachusetts law has been in direct proportion to how big a role the state plays: For very low-income folks, the system is great, and they get great care, whereas before they might have only gotten expensive ER care. Where the law involves individual or employer responsibility … it’s made people very nervous indeed. So, in the end, it may be that more government is the most palatable option for a wide variety of interests. Will we be willing to let the government do the job — and provide the funds for it to do so?
I’ve always been surprised that we haven’t seen more health care coming from the state of Michigan, uncoupled from employment.
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Why Michigan? The Big Three.
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We’ve read barrelfulls of ink about how health care costs are a huge burden on GM et al. It seems to me that if the state of Michigan could somehow take some of that health care load off of the auto makers, that they’d be more inclined to stay in business, and do that business in Michigan.
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Naturally, I don’t know how well union contracts would get along with public health care, but it’s always struck me as an opportunity to reduce the health care costs that the companies bear, helping to keep their solvency (and tax base).
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As long as WalMart’s “health care taxes” are paid to the state or federal government, they can’t play the game of pitting towns against each other for local-specialized tax cuts in the name of jobs. I’m sure WalMart would love to remove the overhead associated with managing the health care in their company — it’s a part of their costs where they don’t have a natural competitive advantage.
The union contracts get renegotiated every now and then. I’m sure they would be willing to renegotiate just about immediately if the state were providing health care, even if their current contract wasn’t expiring. It might be the easiest contract negotiation ever for a union. Both sides would probably just agree to extend the current contract, minus health care, for a longer period of time. The union would be giving up health care (which they would no longer need) in return for a longer guarantee that their pay wouldn’t be cut.
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The bigger question is how Michigan could afford to do this. Do they have any major employment other than the auto makers? Where could they raise taxes to cover the cost? If they raise personal income taxes, the unions would probably insist on a pay raise to cover the added taxes in exchange for giving up their health care.
I’m not expecting Michigan to suddenly offer 100% single payer coverage for everyone. But, they might be able to expand coverage for some people currently covered by the union’s health contract — be it children, retired seniors, something.
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How to pay for it? Well, it’s not like the only three businesses in the state are the 3 auto companies (or the 3 sets of employees who’d be eligible). I’d think a first approximation would be to calculate how much insurance “savings” would exist by taking those people off of private insurance rolls, and tax for (a bit less than) that much, percentage-wise, across all (not small?) businesses. This way, companies which currently offer health care save more in health care savings than they pay in extra taxes, and the companies which aren’t paying for health care are now de facto contributing toward more health care coverage.
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In the case of big auto, they are paying health benefits. End result: their health care benefits get cheaper by more than their taxes go up, so they save a little, and take a little bit of health care out of the negotiations.
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More nip and tuck as I mentioned downthread.
The Goodyear Tire strategy announced this morning, mirrors the trend of the ‘rust-belt’ companies: fund a trust with a payment to be managed by the Union which will fund health insurance for the future coverage. The company then steps away. The Union assumes the risk of extreme healthcare inflation.
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I can just imagine Wal-Mart negotiating something like that with the State. Something tells me that the State would end up in debt and Wal-Mart would be out the cost of a toaster.
…a German-style health care funding arrangement (government organized, but not necessarily government funded), it strikes me that discussing all of these “nips” and “tucks” of the US system is a waste of time.
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The current US system is a mess–a mixture of government paid (Medicare and Medicaid), employer-based (well, kinda/sorta) and individual insurance (the insured get screwed, because the insurers for the individuals have no incentive to negotiate prices down by the care suppliers).
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We’ve been individual payers in Germany (reimbursed by our US insurers) and the costs there are much lower than in the US. There is something seriously wrong in the US regarding costs that nobody in the US wants to seriously address. Until they do address those issues, it really isn’t worth engaging in a serious discussion.
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BTW, don’t get me started on the “big box retailers” use of tax breaks, and I’m not just referring to Industrial Revenue Bonds.
more and more of the employer-insured and personally insured into government programs?
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Perhaps start insuring 100% of pregnant mothers and unborn children. Private insurance could eliminate that coverage, and tUSA/state pick it up. 100% of it. Doesn’t matter if the patient is insured through medicare|aid, their employer, or directly with an insurance company.
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Then, once that’s done, start covering babies. All of them. 100%. Take babies off of the rolls of private insurance.
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Over time, as you nip and tuck more and more, you shrink the private insurance companies and move toward single payer. It doesn’t have to happen all at once for it to be effective. I say start with the babies because everyone loves babies, and everyone understands that the health of a baby shouldn’t be at the mercy of parents or insurance companies. Loosely speaking, who hates babies? As the program expands, the “edge cases” (those about to lose their coverage because they’re too old, or who almost but don’t quite have it because they’re too young) will clamor for it, adding pressure to continue to nip and tuck. Soon, you’ll have all kids under 5 covered. Then, all kids under 8. 12. 16. 18. 21.
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Down the road a number of years, once you’ve got more and more Americans who used to have health care but now don’t (because they had their 21st birthday 10 years ago), they’ll be pissed. They’ll want to expand coverage further — either by increasing 21, or decreasing 60-something.
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Sure, we want it all, and we want it all right now. But, I’d take expanding coverage a bit at a time, moving us in the right direction. It will mean better health outcomes for all, a gradual reduction in overhead costs, help reduce bankruptcies and poverty a smidge, help kids perform a smidge better in school, increase overall productivity an iota, and so forth.
One of the reasons that I mention the German system is that there is also a thriving private insurance system there, but every legal resident is covered. Private insurers are not locked out of the market. My mother-in-law is insured by a private insurer in Germany, and she has gotten better coverage for lower rates than I got in the US, even though she had had breast cancer (since–Gottseidank!–in remission) than I have paid in the US (although I have had no claims that the insurer has actually paid). There are a number of economic differences, that I could describe at length, between the US’s system and the German one, but at the moment, let’s just leave it at this. The US system is intended to increase costs The German system apparently is not.
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You actually do deserve a longer answer, but I’m not in a position to provide it here at this point in time. Is there a mechanism by which I, a mere commenter, can do a post on the main page?
Yes — that’s why we have this blog software to begin with! Go to the upper left, under “Menu”, and you’ll see “new post”. Click that, and when you hit “save”, it goes to the “user posts” section on the main page.
your main page post.