So the House just passed a healthcare bill. But as-is, there are a lot of bad things that are going to happen as a result, and we aren’t hearing much about those.
Before I start, I’m not against reforming the healthcare industry. It would be a wonderful thing if more people could afford proper health insurance. I just think that the current approach is 180 degrees in the wrong direction.
First, insurance rates are going to go through the roof. They simply have to as a result of simple economics. The bill currently being considered requires insurance companies to continue coverage for people when they get sick, and offer coverage to those with pre-existing conditions. Before long they’ll be require to grant insurance for everyone who asks. The money that will have to be paid out by insurance companies is going to soar to unprecedented levels, and that money has to come from somewhere, so it is going to be passed on to those that are paying for insurance. If you think your current health insurance is too expensive, it’s about to get a whole lot worse. (Ideally it would be great for those people to have coverage, but with medical expenses being as high as they are, I can understand why insurance companies don’t offer coverage.)
In 2014, individuals will be required to have health insurance, or pay a fine. This would be the first time in the history of the country that people have a required tax burden even if they have no income. People won’t have the option to not purchase insurance without avoiding a fine, even if they don’t want it. It’s essentially a tax for breathing; I can’t get behind that no matter what anyone says to me. People ought to have a choice as to whether they purchase a product or not.
Also in 2014, businesses with 50 or more employees will be required to offer insurance to its employees or pay a $2,000 per employee fine for not doing so (do the math, that's $100,000). This is where I have one of the biggest beefs with the current plan.
Most businesses are operating on extremely thin margins, if not in the red right now. Yes, there are a few that are making great profits, but these are in the extreme minority. If companies are required to purchase health insurance for their workers, their expenses are going to be a LOT higher (remember, insurance is already expensive, and insurance rates will have to go up to cover the new insured!), and in order to continue to operate one of three things have to happen: either they are going to have to raise prices of their products to offset their higher expenses, lay off workers in order to meet those new expenses, or lay off employees until they have less than 50. Jobs are already hard enough to come by without adding additional requirements and expenses to employers.
This is particularly devastating to companies that hire primarily minimum wage employees, like retail and fast food establishments. If these companies are required to offer insurance to their minimum wage employees, we are going to see a huge jump in prices at retail. A meal at Wendy’s won’t be $6, it will be $10 or more. Prices on groceries, clothes, and other essentials will have to jump too. But it affects the entire supply chain, not just the workers you meet across the counter. Everything will have to be more expensive in order for employers to offer insurance. As if businesses had excess funds now. (If they did, would we currently have 10% unemployment?)
In my job I work closely with fast food restaurant owners. Most fall in the category of “50 or more employees” (if an owner has 2 or more locations they’ll qualify) but do not offer part-time employees insurance, yet they are barely meeting payroll and other expenses as it is. If they are put into a situation where they’re having to offer insurance, they won’t be able to continue to operate as-is. Either their prices will have to go way up, or they’ll have to close up shop. Several of them have actually said to me that they’ll be forced to close down if they have to offer insurance.
Another side effect is that part-time jobs will become limited and hard to come by, and essentially none of what remains would be able to pay more than minimum wage. While the bill makes provision to count part-time workers as half of a full-time worker as far as the “50 or more” provision goes, health insurance for part time employees costs the same as full-time employees (they’re not half a person). Businesses would certainly elect to hire a single full-time employee rather than two part-time employees because their insurance costs would be half as much, only having to offer insurance to one individual instead of two. (Including part-time employees in the count is essentially required in the plan, otherwise businesses would cut all employees back to part-time hours to avoid paying for insurance.)
But even worse than all of this is that obvious solutions to the fundamental underlying problem are being totally ignored:
- No effort whatsoever is being put forth to try to lower medical expenses so that insurance can be more affordable.
- There is no mention of limiting malpractice lawsuit awards. Malpractice suits and insurance are two of the primary reasons that healthcare is so incredibly expensive.
- Nothing is done to try to encourage people to be more responsible about their own personal care. Quite the opposite, in fact… if people are more or less guaranteed healthcare, many will fall back on doctors and hospitals when they don’t need to.
- Nothing is being done to encourage the use of less expensive generic drugs instead of expensive medications from the largest pharmaceutical companies, or for people to use natural remedies, which would provide huge savings.
- Nothing is done to encourage more competition between companies that work in medicine. It will actually be easier for those with monopolies in the system to maintain them.
- No penalties are put in place for people who abuse their bodies through abuse of tobacco, alcohol, or other drugs, or other self-damaging behaviors. They’re granted the same level of care as someone who takes care of him/herself.
- No effort is made to encourage increased use of less expensive procedures instead of the more costly ones. For example, way too many CT scans and MRIs are being prescribed than are needed, driving insurance rates up artificially.
- No effort is made to educate people about how to take care of themselves by eating healthily and exercising.
I do agree that something ought to be done about the current state of medicine in the U.S., but the bill currently being considered is certainly not the way to solve the problem. It’s like putting using a band-aid on an amputated limb. It would be far better to at least TRY to eliminate the underlying problems instead of trying to cover them up. And considering that no government social program has ever lived up to its intended consequences, there is no way I can get behind this one, especially being as flawed as it is.