Saying “time is a wasting,” to pass healthcare reform, senior White House Advisor David Axelrod dismissed efforts to reach consensus on legislation as secondary to getting a new law passed. “We’d like to do it with the votes of members of both parties,” Axelrod said. “But the worst result would be to not get health-care reform done.”
Axelrod could not be less correct. There is something worse than not getting healthcare reform – getting healthcare reform wrong.
The House leadership, led by House Commerce Energy & Committee Chairman Henry Waxman, has unveiled a hybrid plan – which at 1000 pages I doubt he’s even read – making healthcare a “right” in the United States, much like speech, assembly, religion and the right to bear arms. Of course, if you choose not to exercise any of these rights, you don’t have to pay a tax to the government. Not so with this new healthcare “right.”
Since debacle known as Hillarycare in the early 1990’s, the business community has warmed to the idea of a “single-payer” healthcare system. Their logic stated is simple: if they no longer bear the financial obligation of offering healthcare to their employees, it’s good for business.
The single-payer system is attractive to many in business and labor, but has spooked politicians because of its failures in other countries and its failure to pass political muster in the states. So concepts like “universal healthcare” have morphed into “universal coverage” and “cost-cutting reforms” which poll better with the American voters. The current proposal in the U.S. House of Representatives aims to create universal coverage by requiring that employers either provide healthcare benefits or pay a new payroll tax of 8%. Anyone who opts against healthcare coverage also must pay a 2.5% levy on their wages. This money, along with a tax “surcharge” on families making more than $500,000, or individuals making significantly less, will fund a government-run health insurance benefit to catch all of those not insured by their employers.
This House healthcare bill may be the beginnings of a single-payer system. By establishing an insurance program of last resort – funded, of couse, by taxing the most productive members of society – many businesses will opt to pay the payroll tax penalty and force their employees into the government-run system.
Once we are all in a government-backed insurance program, the goal of having a single-payer system will have become real. And that “single payer” is the taxpayer. But is that what we really want?
Yesterday, I had lunch with a friend who used to operate a small business in West Hollywood with two employees. Outside of salaries, two of his highest expenses were healthcare insurance and parking benefits. Shifting the cost of healthcare to the government would have helped him stay in business.
The proposition got me thinking about what else we could create a single-payer system for and have the government pay? What if, for example, West Hollywood created a single-payer parking system that would allow everyone to get to park their cars for free?
Businesses would like that idea on two counts. They’d no longer have to pay for employees to park their cars, and with free parking, more customers could come and visit.
The users of the single-payer parking system would like it, because they could park for free.
But ultimately, such a system is unsustainable. Eventually, the quality and availability of parking options would diminish as demand created by a zero-cost parking system would surely exceed supply, and the slippery slope would begin.
A single-payer parking system would then have to be regulated! Access to parking would have to be restricted and entrepreneurial business owners would develop separate fee-based parking systems that would guarantee access. In the end, only those who were willing and able to pay for parking would have access to quality, available parking options. Which is not much different than where we are today, where limited on-street free parking is available, and private lots and meters fill the rest of the demand for parking.
It isn’t hard to imagine the same thing happening in a world with government-run healthcare insurance. It’s a future where only those who can afford something better than the government policy can – and will – get better care. That inequality is what is fueling the debate today. So we’ll be brought back to square one, only we’ll be billions of dollars poorer for the effort.
If healthcare reform is as important as Axelrod and the Obama Administration say it is, then it is important enough to have a healthy national debate and consider the consequences of our actions before we take them.