Matthew Holt

The bleedingly obvious

It makes no sense for small businesses to provide health insurance to employees. This testimony from a small business owner to the House Tri-committee yesterday shows it. (Same is true for all employers but none save Ron Wyden dare say that).

Health insurance should be paid for by some form of taxation (VAT, income tax or payroll tax) that is in  proportion to businesses and individuals profitability/income, and small businesses (and big ones) should be left to do whatever it is they do. I cannot fathom how NFIB manages to convince its members otherwise, but it does appear that there’s a crack in that dike with various small business groups coming out in support for real health reform.

Having said that, I don’t think there’s too much likelihood that a typical low wage business will get much help anytime soon.

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NateDeron S.Matthew HoltJohn R. GrahamA. Friend Recent comment authors
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Peter
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Peter

Oops, my previous comment should have been directed to Donald Johnson.

Wendell Murray
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Means testing is a waste. Where money goes to the extent that a competitive market works, is determined by a competitive marketplace. To the extent that no competitive marketplace exists, allocation is made administratively, but ideally on a broad-brush, rather than detailed basis. No alternative aside from the current mess. The simple, but enlightening framework presented by Prof. Christensen, et. al. is useful. In regard to medical services which make up the bulk of activity/costs: (1) precision medicine (competitively determined), (2) subscription medicine for chronic disease management (administered and potentially somewhat competitively determined) (3) fee-for-service (administered). No reason why suppliers… Read more »

Peter
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Peter

Wendell, who is going to do the means testing and who is the money going to be paid to? Your idea still does not control costs.

Donald E. L. Johnson
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Peter, Deductibles would be means tested. Some people can afford to pay off $5,000 in deductibles in a year or two, and some can afford to pay off $1,000. The “take politicians out of health care” obviously is a sarcastic and unrealistic recommendation, but we shouldn’t give politicians a bigger role, as Obama is trying to do. As for the education recommendations, good luck with that, too. Politicians spend on plans that make someone richer, not smarter, because making someone rich attracts campaign contributions. Making someone smarter doesn’t. Indeed, for politicians, dumber is better. Look at how Obama convinced the… Read more »

Wendell Murray
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Nate: in brief, nothing simplistic. My comment was in response to another comment to the effect that businesses which cannot afford to pay health insurance premiums for workers should go out of business because implicitly poorly managed. In fact ability of a company to pay benefits including health insurance premiums for workers is a reflection more of distance for a given company from a competitive market and/or operation in an industry where average wages are higher than normal so that benefits as a percentage of wages are relatively low and therefore less of a factor competitively. The market for medical… Read more »

Nate
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Nate

The entire unemployement system is screwed up. There are millions of highly skilled people looking for work. There are millions of small businesses that would love to have them as long as they could. For higher paid people they make more money on unemployment then jobs can afford to pay so they sit at home and don’t work. How is anyone benefited by paying people not to work? The current system is completly counter productive. In good times I can’t afford people that skilled and talented, in bad times I should be able to hire them becuase I am the… Read more »

Nate
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Nate

Wendell you have a simplistic view that ignores the consequences of the changes you request. Lets say employers are removed from the provision of benefits, they save 5% of their payroll. The federal government now provides benefits in the same inefficient way it does Medicare and Medicaid, rampant with fraud and waste, and in order to pay for it charges them 8% in payroll taxes. Ya we saved 5%, doh now someone with no interest in controlling cost provides it and my taxes go up 3% more then I saved. So what has that small employer gained? When employers provide… Read more »

Peter
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Peter

Deron, my support of government run single-pay is one issue and in the end will prove to be the only system that works at driving down costs and delivering healthcare, but I also recognize that fixing “government for money” will also need to be done to get it to work properly(along with a whole bunch more). Maybe we can get both fixed at the same time?? Politicians can’t just give us a public option by spending (and printing) money, they’ll have to make some enemies to get it to work, and that means reducing someones income.

Deron S.
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Peter – I’m going to need you to reconcile something for me. How can you use the term “spineless politicians” in one of your comments above when you have made it clear many times that you are an unwavering advocate for a government run healthcare system? Something’s gotta give.

Matthew Holt
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Wow John and I almost agree. Employers shouldn’t be vehicles of insurance. But in his perfect world, you’d need such vicious regulations and mandating of both insurers and insurees to make it work that his friends at PRI and Cato would declare him a crypto-marxist. That would be fine with me, but not with his friends! Of course Pauly is a loon who thinks that the individual market works fine for 80% of the people in it. He missed the day in economics class when they expalined the 80/20 law 🙂 But on the flip side there’s growth in nutty… Read more »

John R. Graham
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This is a great series of comments. Quite right: small businesses are not effective at pooling risk, which is done at the insurer. An individual with a portable, guaranteed renewable, incentive compatible, health- status policy (see Mark Pauly of Wharton or John Cochrane of U. of Chicago) is insurable with actuarial stability. A small business is not because neither the employer nor the insurer know who the employees will be next year or how many there will be.

A. Friend
Guest
A. Friend

“But this is America, not Canada, the U.K. or some other fantasy land.”
And all this time I had no idea that Canada and the UK were figments of my imagination.
Thanks for clearing that up or is this just the new “American exceptionalism”?

Peter
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Peter

Donald, do really think that the workers at Alpha Express Inc. would be able to pay the deductibles from a high deductible plan? And if accompanied by an HSA could they afford to take enough money from other living expenses to actually put meaningful money into the account? High deductible plans do nothing to stop the ever increasing exponential cost of healthcare, they only shift cost and reduce risk from insurers to patients. Hospitals now are feeling the result of the economy because those with insurance don’t have the money to pay their deductibles and are postponing treatment. http://www.commonwealthfund.org/Content/Publications/Fund-Reports/2005/Apr/How-High-Is-Too-High–Implications-of-High-Deductible-Health-Plans.aspx http://www.boston.com/news/local/massachusetts/articles/2009/06/21/costs_are_keeping_patients_from_care/… Read more »

Tom Leith
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Tom Leith

I’m afraid I don’t understand what Mr. Murray thinks I’m wrong about.
t

inchoate but earnest
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inchoate but earnest

Now, I believe, comes Matthew’s turn to smooth the sheets over the strange bedfellows he’s attracted to this edition of his single payer call-to-action.
Right on, dude, single-payer! Just so long as pays via a high-deductible health plan…. 😀