The Debate
Some people view this as a Republican versus Democrat or liberal versus conservative issue; the evil, heartless Republicans do not want to help the poor uninsured people while the caring liberals just want to provide insurance to everyone. This could not be farther from the truth. Most of us, liberals and conservatives, agree that our health care/insurance system needs to be fixed and that access to health care is not generally available to everyone. Some conservatives even believe that we should provide help to people that are not able to afford health insurance. Our compassion fills us with the desire to help others in need. The problem is that most of us are misinformed about what the real problems are, much less how to fix them. We rely on our elected leaders to do what's right. Unfortunately, we're led to believe that the problems are bigger than they are (e.g., 46 million uninsured Americans, see Myth #3). To provide some basic facts and dispel a few myths, please see An Introduction to the 10 Myths of American Health Care. It is important to understand the real issues before agreeing to massive changes in our health care system that may not increase the quality of your care or lower your costs. In fact, the proposed changes may increase your costs and lower the quality of your care.
So let's put aside the labels and party lines and honestly discuss the issue. The politicians are not interested in an honest discussion or they'd stop repeating the myths and stop lying to you about the real impact of their "reform". What impact will it have on you?
The Government Option
The House of Representatives has released a 1,000+ page health care "reform" bill. The intent of this bill is to provide health care for everyone making health insurance a right for all people. Whether you think health insurance is a right or not is for another discussion. What's more important now is what the politicians are trying to do to health care. According to this AP story on the House plan:
The legislation calls for a 5.4 percent tax increase on individuals making more than $1 million a year, with a gradual tax beginning at $280,000 for individuals. Employers who don't provide coverage would be hit with a penalty equal to 8 percent of workers' wages, with an exemption for small businesses. Individuals who decline an offer of affordable coverage would pay 2.5 percent of their incomes as a penalty, up to the average cost of a health insurance plan.
Bloomberg reports the bill also "includes mandates to purchase coverage and a public health-insurance option". This is pretty much what was expected. It appears that employers, "rich" people and some healthy individuals are going to cover most of the tab for this health care plan. I could go into the fact that this is a major redistribution of wealth. You could read the quotes on the right about wealth redistribution. I could even suggest that this goes against everything that our founders had in mind when they wrote our Constitution and wanted free markets and limited government. All of this may be true but is not relevant to most people. A lot of people will look at this and think
"They're taxing the rich. I don't care, it doesn't affect me."
"An 8% penalty, no big deal, my employer will have to pay it. I don't care, it doesn't affect me."
"I already have health insurance from my employer. I'm happy with it and I can keep it. I don't care, it doesn't affect me."
Should you care? Does it really affect you? If you take the politicians and the media at their word, no it does not affect you. Of course, the media always tells the truth and who's ever heard of a politician lying?
Your Right to Choose
When you listen to the media and the politicians you'll hear about the 47 million people who are uninsured and need help (see Myth #3). You'll hear about how much we're spending on health care costs (Myth #2). You'll hear about the high cost of drugs (Myths #4 and #5). You'll hear about the government option for health insurance that will provide competition (Myth #1), will be better and more like other countries (Myths #1 and #10), and will insure the poor (Myth #8). You'll hear about government mandates that will require people to have health insurance and will get us to universal coverage (Myth #6). You'll hear that our health care system is broken and needs to be fixed and that we cannot afford to continue in the direction we are headed. Well, that statement is true. But as you can see, most of the rest what you are being told is all based on myths and lies.
The biggest lie currently being told is about the proposed "government option" for health insurance. This will be a plan that will "compete" with commercial insurance policies. The argument is made that competition will help bring the prices down. I know Karl Rove is not the most bi-partisan figure but he makes a great point in this Wall St Journal piece: "1,300 companies sell health insurance plans. That's competition enough." Do we need another insurance company to increase competition? But again, none of this impacts you, right? Obama has promised that "If you like what you're getting, keep it. Nobody is forcing you to shift." That's the lie.
Most discussions on this subject miss a key point when discussing the government option and whether people will truly have a "choice" to keep their current healthcare plan. This piece
by Newt Gingrich quotes a study that says "as many as 119 million currently insured Americans would drop private coverage and enroll in the government plan". This is a very misleading statement and seems to indicate that Americans, private individuals like you, would get to choose whether they "dropped private coverage" in order to enroll in the government plan. It infers that you might be one of the 119 million that would choose the government option being discussed. The point missing in this is that most people have a healthcare plan provided by their employer. You know that evil, greedy, vilified entity that takes advantage of the working person in order to make a profit at any cost. Well, guess who really has the choice as to whether you keep your current health plan or are enrolled in the government plan? It's not you; it's that evil employer of yours. The same one that makes too much money and needs to have their taxes increased in order to "spread the wealth around" because "it's good for everybody". Again, none of this impacts you, unless you're happy with your current employer-provided health insurance plan and your employer chooses to drop your private insurance coverage leaving you with the "choice" to enroll in the government option.
Your employer's choice is not something they talk about when pushing this government option, but it's something you should consider. Think about what you are worth to your employer. Remember that companies are not in business just to provide jobs to people (except for the Government). They exist to make money for someone – maybe shareholders, maybe a group of investors, maybe a single owner, maybe even a charity. Regardless of whom it is their goal is to make money. As an employee you bring a certain value to the company whether that is providing a service that people pay for, manufacturing a product that people buy, etc. Most people understand this but consider the following example.
Your company produces "widgets" and sells them to the public. You help produce those widgets and for that service you bring in $75,000 to the company. You get paid $50,000 in salary plus your employer pays for health benefits of $12,500 (about the average cost of insurance for a family of 4 in 2008, see here). In addition your employer pays half of the social security and Medicaid as well as other employer related taxes for unemployment insurance that total about 10% of your salary. So here are your costs to the company:
Salary | $50,000 |
Health Insurance | $12,500 |
Taxes | $5,000 |
Total | $67,500 |
In this example your employer makes a profit of $7,500 or about 10% of what you bring in to the company. Now consider that your employer's taxes are going to increase along with many other employer unfriendly mandates being pushed by the Obama administration. What will happen to that profit? It will go down. In order to bring it back up the employer must do something. He could raise the price of his widgets thereby increasing what you are worth to the company, but in today's economy that would be a bad idea. He could decrease his costs by lowering your salary or cutting your benefits. He could also decrease costs by eliminating some jobs and making the remaining employees work harder – just "hope" your job is not one that is eliminated. Or he could produce the product cheaper by shipping the production overseas and eliminating all of the American jobs. Whatever choice they make, your employer needs to cover his costs and make a profit or it eventually reaches a point that your employer decides it's not worth continuing in the business and will close up shop.
Now consider the lie you are being told about you having the choice to keep your current healthcare plan. Your employer provides and administers this benefit at their cost. When the government plan comes along your employer has the choice to drop your coverage and let you decide whether you want to pay for private insurance or sign up for the government plan. Your employer can choose to pay the fine, or whatever they'll call it, for not providing your insurance and you'll be on your own. Obama and the rest of the liberals have promised that the cost of the government plan will be cheaper. The currently proposed House plan puts the "penalty" at 8% of payroll. In the above example, that would be 8% of $50,000 or $4,000. So, what do you think your employer will choose for you? Will he continue to pay the $12,500 or pay the $4,000 penalty? But it doesn't affect you.
There is an added bonus for your employer in that they will no longer need to administer the benefit and incur the HR costs associated with it. After all, the government run option will be administered by those efficient government bureaucrats (think of the DMV and Medicare).
Do you still believe it will not affect you? Would you trade your current coverage for the government option? Do you think you'll have a choice? And how about that government option? Will it be better than what you have now?
Your Dwindling Choices
Once you are on the government plan, who will make the choices? Obama has already told you that you will not be making the choices. According to the LA Times, "Obama said families need better information so they don't unthinkingly approve 'additional tests or additional drugs that the evidence shows is not necessarily going to improve care.' He added: 'Maybe you're better off not having the surgery, but taking the painkiller.'" Do you think you will choose if you are better off with the surgery or the painkiller? Do you think "families" will choose whether to approve "additional tests or additional drugs"? Or will government bureaucrats approve them? Don't delude yourself. You know the answer.
If your employer does decide to keep your health insurance, what about the talk of taxing your employer provided healthcare? Remember the ad from Obama that said "taxing health care instead of fixing it. We can't afford John McCain." And the one that claimed McCain's idea would be "the largest middle-class tax increase in history" and the "McCain tax could cost your family thousands. Can you afford it?" (See more on this here). Think about this, who is going to pay the tax on your healthcare? Your employer or you? We've already established that employers are evil profit-makers so I doubt the employer will pay. Again, what choices are you being given? NONE!!! But it doesn't affect you, right?
What you can do:
Check out the list of questions you should consider and then contact your representative and get answers.
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