Originally published at Am I the Only One Dancing?. Please leave any comments there.
The bulk of this article first published as Health Care Reform: The Sky is Not Falling on Technorati. New content added to end of article.
A new statistic has hit the media cycle designed to send all of our hind brains into panic and pressure the Democratic party
into backing off of the Affordable Care Act
(ACA). The statistic is this: 30% of employers
intend to stop offering employer based health insurance
when the ACA comes to pass fully in 2014.
Enough to make you shake in your boots, right? How will all those people get insurance? They’re going to be abandoned! Things are going to be worse than ever!
Really. Just relax. The sky is not falling, Chicken Little.
The reality is – that’s what the ACA was (in part) designed to do. The United States
is one of very few countries in the world that tie health care to job status, and there’s a reason for it not being a common model – it’s unattractive for both the employer and employee.
From an employer’s perspective, not having to cover health insurance makes small business startup a lot less expensive and a lot less risky. A small business which suddenly discovers that one of its key employees has an expensive health condition currently often has to make a heartbreaking decision about whether to continue to offer health care, as the small employee group can rapidly price premiums out of the business’s reach. Paying a penalty for not covering health insurance is a very risk-averse way to deal with the issue, but a valid one for many businesses.
The health care pools built into the ACA spread the risk much further, plus add in the young and healthy to the insurance pool (that is the justification for the provision allowing young adults to stay on their parents’ plans and for the health insurance mandate). This will bring the cost down for individuals significantly – and for low and some middle income families, the subsidy provided by the federal government will replace the current employer subsidy.
As we settle into the new law and unintended consequences become apparent, they will be dealt with as were similar issues with Social Security and Medicare
– new amendments to the law will rectify the problem.
The ACA is not a perfect law. It has a lot of flaws and was far more complicated than it needed to be (a single payer ‘Medicare for all
‘ would have both eliminated the current two-tiered system and been lower cost all the way around). However, on this issue, the fear is largely unfounded.
The transition is not going to be perfect. Some people are going to struggle with change and figuring out what to do. Gaps in service will exist and will need to be addressed. But the world will settle into a new normal that means that artists and writers and self-employed people and people who are employed by small businesses
are just as likely to have affordable health insurance as those employed by large companies.
By the time 2020 rolls around, Americans will have gotten used to the new law, made some changes to improve it here and there, and be unable to imagine life without it. And the fiscal effects on the family and on the economy will begin to show, and the cost of health care for government, individuals, and businesses will begin to stabilize and eventually drop.
And that’s not a bad thing.
Here at my own blog I want to expand a bit on this very important topic to distinguish between what the Affordable Care Act actually does compared to what its demonizers accuse it of doing. I’m going to focus here on the individual mandate, the requirement that everyone buy insurance.
First of all, no one is going to jail for not having insurance. You might pay a fine, but you won’t go to jail. While there has been a lot of focus on the negative aspects of the individual mandate (the requirement that everyone has health insurance), there has been little focus on the positive aspects. Partially because of bias, I’m sure, but also because it’s somewhat harder to explain, so I’m going to try telling you a story.
In Job: A Comedy of Justice
(one of my favorite books of all time), Robert Heinlein
had his poor persecuted main character jumping from universe to universe, each a recognizable variation of our own, some clearly dystopian, others more utopian. In many of these universes, the character took a job as a dishwasher, a job that is easier for someone without papers or proveable history to obtain, that often pays daily or sometimes weekly, and isn’t a critical function that the next universe hop will disrupt.
On one such jump, the character (and his beloved companion) land in a country that has a social safety net paid for by taxes, much like ours. He is outraged to find that his old age (social security) tax is automatically debited from his check each week whether he wants the service or not, and insists that it’s a really nice service, but he can’t afford it.
Robert Heinlein was missing the point. While we can argue all day about how much poor ‘Job’ should have to pay for his retirement, and whether that cost could be borne better by those making significantly more than the average dishwasher, what isn’t really up for argument is that the consequences to not only the individual, but his family and community and society, for failure to plan for his future are too costly to be ignored.
Moreover, (and this is key), because the cost of the individual’s failure to prepare is borne in part by family, community, and society, society has a stake in ensuring that plans for his retirement are sufficient. That is both the legal and moral basis for taxation for contingencies such as retirement and other safety net issues.
Further, because these are unpredictable costs, but almost never negligible, and because they vary, and because there is a strong chance of discrepancy between an individual’s need for help with retirement funding and his ability to fulfill that, a system such as taxation is both practical and just.
So, even though Heinlein’s fictional hero suffered from the payroll tax taken from his income, the long odds were, had the character stayed in that universe (as most of us do) that not only would he have received the full benefit of that initial sacrifice, but that supplement from more highly compensated workers (rich people) would help ease his old age.
And how does that benefit rich people? In a lot of ways, actually. To start with, people whose basic needs are provided for have more money to spend, so if the rich person is selling a product or service, he now has a consumer instead of someone in crisis who is costing public systems money without contributing. A person who is living contentedly and well on an income that meets his or her needs is also less likely to foment rebellion and demand a greater share of the fruits of productivity.
This translates pretty well to health care insurance. The costs of the uninsured are shifted, and not in efficient or effective ways, to those of us who carry health insurance. When everyone pays for health insurance however, especially if, as in the ACA, there are supplements for those for whom health insurance would otherwise be priced out of practicality, all of us benefit in several ways.
The cost per individual for health insurance comes down.
The general health of the population, including communicable and chronic diseases that are expensive and/or deadly on a societal level, improves.
The effects of the two-tiered (wealthy vs. poor) health care system begin to be equalized (though it is important to note here that wealthy folks can buy better care in any country in the world, the care of the poorest goes up, not down, wherever Universal health care is implemented)
Artists and entrepreneurs and others who don’t generally work for a salary have far more access to health insurance, allowing for more innovation at the creative and small business level.
By moving health insurance (partly) from a business expense to a government expense, a significant burden is lifted from small business, again improving job creation.
People whose primary reason for being unable to work, or work to their greatest potential, due to the cost of insuring and/or treating a chronic condition, can improve both productivity and quality of life.
Again, I’m not going deep into the specifics of the bill. The bill has issues, and some of those issues will have to be fixed. But the idea of the individual mandate, though it will probably need some tweaking to determine the optimal level of supplement for the ‘sliding scale’ feature, is not one that is going to lead to social or business disruption or ‘curtail individual freedom’ in any meaningful sense.
In fact, the ability of some people to obtain insurance affordably will lead to freedoms some of them have been craving for years. There is a reason that the people of western Europe are not rising up against their ‘health care overlords’ and demanding an ‘American-style’ system. It’s because universal health care is a vastly superior health care system to ours for nearly everyone in the country on virtually every measure at far lower cost. And that’s just a fact.