Can't Get a Job? Blame Health Reform

Proposals aimed at providing health insurance for some 47 million uninsured Americans are catapulting toward passage. This attempt at health reform may be the best way to derail any hope of economic recovery.

Why? Small businesses --those with less than 500 workers-- employ roughly half of the nation's workers. Some 60 to 80% of new jobs have historically been created by small businesses, too, according to the federal government's Small Business Administration. For the past 20 years, these same small businesses have been griping that the cost of health insurance is their biggest problem.

The government, ever willing to help, has changed health mandates dozens of times. Thanks to these changes, which have largely demanded new and expanded coverage, health insurance costs have soared some 113% in the past decade. The result is that businesses with less than 200 employees have been dropping health coverage left and right. Where 68% of these companies provided health insurance in 2000, only 59% did last year, according to the National Federation of Independent Business' annual Problems & Priorities study.

Now the federal government is threatening to take the choice away. If you pay employees more than $250,000 annually--in other words, if you have more than 5 workers pulling down a median $50,000 salary--the proposals say you'll either have to provide health insurance or you'll have to pay a surcharge of up to 8% of your payroll. For the math-challenged, that's $80,000 for every $1 million in payroll. Again, if you figure a median salary of $50,000, that means for every 20 workers, health insurance will cost more than a worker and a half.

Throw those additional costs into an economic environment where sales are slow and it's virtually impossible to get financing and what comes out? Layoffs, obviously. As any business owner knows, there are only so many ways to balance the books in tough times. You can sell more, charge more or cut costs. The economy has a dramatic impact on what you can charge and sell, while the government is increasingly nosing into the costs you can't cut. The only thing that's truly in a business owner's control is payroll. So, we're putting small businesses--the very businesses we have always relied on to pull us out of bad economic times--in a position of having to lay off workers to accommodate a government mandate.

Ah, but health insurance is important, you say. We need businesses to step up and pay the tab for all those poor people who can't afford coverage. And, we need to give them Cadillac care, even if all they can personally afford is a tricycle. Are you kidding me?
Why is it that no one has stopped to ask whether we, as a society, are being asked to pay too much for the health care of our fellow man? Why is no one discussing the fact that it may be a societal necessity to provide basic care--the ability to get immunizations and medications, for example--but it's not an imperative that we give every drug addict the ability to go to a Malibu detox center on the public dime?

We are equally afraid to question whether the public should be paying for a $100,000 operation that will give some hospital patient an extra two weeks to live. To be sure, that extra two weeks may be incredibly valuable to that family, but is it appropriate to ask everyone else to pay the tab? Shouldn't we be saying, as a society, that there are limits to what we will pay? You, as an individual, should not be restricted from buying whatever care you can afford. But the government should not be paying for everything. If your family so values that extra two weeks, shouldn't your family pay the $100,000, not taxpayers, business owners, other employees?

Why, too, are we shoving the costs onto businesses? Why are we not talking about mandating health coverage in the same way that California mandated auto insurance? The state determined that it was a public nuisance to have uninsured drivers slamming into other people and then throwing up their hands to say that they couldn't afford to pay for the damage they caused. Now every driver in the state is required to have at least basic coverage and the state makes sure that these bare-bones policies are affordable. What's wrong with that? Why don't we simply offer a scaled-down health policy that would provide immunizations and basic care and leave the Cadillac coverage to those who can afford it? Why is this such blasphemy?

What we're doing now is the equivalent of saying: "Do you want a $100,000 Mercedes?" If I have to pay for it, I'm going to say no. But if you're paying, sure. I'd like a nice smokey blue convertible one in my driveway. Pronto.