Forced insurance an unhealthy idea
Opinion
Daily Gazette, Schenectady, NY
Published Sunday, March 26, 2006
Advocates of a new state law that would mandate medium- to large-sized employers to pay for their workers’ health insurance have cause to be frustrated by the status quo in health care: It’s an inadequate system that in New York alone has pushed hundreds of thousands of low-wage workers onto the Medicaid rolls and left even more without any insurance. Still, their pro posal would be ruinous for thousands of New York businesses, and driving them into bankruptcy or across state lines would hardly do the working poor - or state and local governments - much good.
The bill would be incredibly expensive, forcing businesses to pay $3 per working hour for each employee. Some of these workers - in the retail sector, for example - may only be making $8 or $9 an hour; so the bill would effectively raise their employers’ payroll costs by a third. In a competitive business world, that kind of hit could be fatal. If the business were near a border and had to compete across state lines, for example, they couldn’t raise prices enough to cover their costs. And even if they could, would the resulting inflation be good for the economy?
In addition, the bill would be a disincentive for small- to medium-sized companies - those with fewer than 100 workers - to keep growing, lest they crossed the threshold and had to start paying for health insurance.
Health insurance is an enormous burden on whoever has to pay for it - individual, employer, employee or government. While ideally, all employers would offer their workers some coverage, the idea of forcing them to is flawed - especially when the plan would be so expensive and when only certain employers would have to go along.
It pretty much has to be an all-or-nothing proposition, and all is clearly preferable. But to be done properly, it should be offered by a single payer - the U.S. government - which would allow far greater economies of scale than any other option.