Health Care Headaches

Marc was kind enough to send me this opinion piece from the WSJ, with a suggestion that I do a post, considering that I live here in the land of cheese.

Oy.

Shall we begin with the errors of fact in the WSJ piece? This article by our local dead-tree outlet actually lays out the correct costs of the plan to employers and employees: a payroll tax to the employee of 4%, and a 9 - 12% of tax levied on the employer. Both taxes would be calculated on the gross earnings of the employee. The current social security burden on the employer is 7.65%, not the 15.3% listed in the article; half of the total tax is paid by the employee through withholding. Therefore, even at the 12% rate for the new plan, an employer would only pay 19.65% in total SS, medicare and health taxes, not the 29.8% claimed. How much more the employee will pay depends on their own current health cost. The 20% the writer claims will be the total tax burden on the worker seems more than a bit inflated: a 6% income tax (top tier) plus the 4% health tax is only 10%. While our sales, use, stadium, entertainment district, cigarette, gas and myriad other taxes do add to the total burden on the consumer, I rather doubt they are worth an additional 10% of income.

The additional tax to the employer would be mitigated in large part by the savings incurred when current health plans are terminated. Exactly what the savings (or additional cost) would be is dependent on the specific structure of the funding of the health costs for any given employer. For my own employer, it will be a bit of a crap shoot; the employer currently pays a set dollar amount toward the premium for each level of coverage, regardless of the salary of the employee covered. Based on where my own salary falls in the range, and what I know of our insurance costs, I highly doubt the new plan would save us substantial dollars. We'd be lucky to break even.

All employees would pay a set 4% of their salary toward health care. Theoretically, everyone has access to the same standard of care. In practice, however, those with extra bucks to spend will have the ability to purchase "more expensive" treatment. Translation: Those with more money receive better health care.

It isn't simply the employers and employees who will need to change, however. The current structure of physician groups, HMOs, hospitals and clinics in the state is not optimally positioned for this type of plan. The Dems are counting on a willingness for that to change.

Yeah, right.

If the writer of the WSJ is correct about there being no requirement that an able-bodied adult be working in order to qualify under the new plan (I could find no corroboration of this), the influx of the sick and uninsured from other states would simply sink us. We've had this problem in the Milwaukee area in the past with our welfare system; who knows how much it cost the city before the system was finally reformed.

Over the last several years, the powers-that-be have put a great deal of work into improving the business climate in Wisconsin, seeking to attract new business. If this plan is implemented, it has the potential for driving away the segment of businesses - both potential new employers and current employers - whose costs would actually increase under the plan. Way to shoot ourselves in the foot.

Health care reform is a wonderful and magnificent cause. Equality of care is a noble goal. But until the ability to propose reform is taken out of the hands of pin-headed, short-sighted, barely-sixth-grade-math-skilled politicians looking for a platform to use in a reelection bid, no truly equitable plan will be devised. The issue is incredibly complex, and it is naive at best (criminal stupidity in reality) to propose a one-size-fits-all solution to the problem.

But it sure sounds purdy in a campaign speech.