It doesn’t take an economist to recognize the inherent flaw in this reasoning. Whenever you add a layer of governmental regulation and requirements to anything, the people suffer. Red tape, even with the best of intentions, results in costing consumers and businesses more money, thereby reducing commerce and slowing the economy. Requiring all employers to provide health insurance would be a crushing blow to the economy, and could stifle the growth of up and coming small businesses in the United States.
In the health care debate, there are specific facts that for some reason are rarely discussed. First, we already insure people with low or no income through Medicaid programs. The health care reform will do nothing to help the poor. Second, no one is ever denied emergency medical care in the United States. It’s against the law. Third, many of the uninsured have made a personal choice not to buy available insurance. If they can afford it, but don’t want it, who are we to say they have to have it?
Obviously we as a society would prefer that most or all of our citizens have medical coverage. The debate should be focused on the most cost efficient way to make that happen. Instead of creating a DMV style government agency and ruining the world’s top health care industry, we should focus more on ways to drive the private sector to help us reach our health coverage goals.
There are many ways to make this happen. For example, the feds could create a business tax incentive that gives 101% credit for every dollar contributed to employee health coverage, up to a certain amount. This would cover any spending a company did, as well as an additional tax credit. It would be financially beneficial for employers to offer coverage to their staff, whether they are part or full time.
This would also stimulate competition for employees, as companies that didn’t offer health care would have to recruit more aggressively, offering other compensation to their potential hires to balance the offer. Instead of billions of dollars going into the red tape of a new governmental agency, that money could help drive the economy, resulting in increased commerce, and increased tax revenue. It could pay for itself over the long term.
By keeping the private sector in charge of insurance, we will continue to drive competition, and consumers will benefit. Businesses should not be required to pay for health insurance, but we can make them want to.