Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, August 2, 1994 TAG: 9408250055
SECTION: EDITORIAL PAGE: A4 EDITION: METRO
SOURCE:
DATELINE: LENGTH: Medium
Many businesses would like to shift all the rapidly rising cost of health insurance onto individuals and families, a problematic move for several reasons. Short of this, the best relief in sight for employers who do provide coverage - and who thus carry the load for companies that don't - would be a mandate for all businesses to do the same.
Relief, that is, if Congress can restrain its zeal to placate the vocal, well-organized small-business lobby. The Clinton health plan offered subsidies and caps to ease the impact of mandated health coverage on small companies operating on small profit margins. Shrill predictions of business failures, though, have led congressional committees to reduce small-business contributions to a pittance.
The upshot? Those measures would make up the difference by increasing the financial burden on large companies - the ones, by and large, that have been paying for their workers' coverage all along.
This unfair subsidy of small businesses by large is an effort to calm the hysteria generated by such lobbyists as the National Federation of Independent Businesses, which estimates employer-mandated health insurance would cost 850,000 jobs.
How realistic is that estimate? The Congressional Budget Office, in an unblinking review harshly critical of savings projections in the administration's original health plan, concluded it would not result in a net loss of jobs. Further, it predicted most employers eventually would pay lower health-insurance premiums, which could result in higher wages for workers.
Let's look at the record. In Hawaii, universal health coverage has been in place since 1975, through the state's workers-compensation program. Small businesses were hurt very little, and businesses overall paid just over $2,000 per employee for health care in 1993. The national average for businesses in 1992 was $2,284 per worker.
The threat to small businesses appears overstated, and the benefits of reform largely ignored. Many small businesses already offer health insurance to their workers. Employer mandates would level the playing field among competitors; voluntary group alliances would allow those who have been buying policies at high cost to negotiate discounted rates.
Businesses that thus can offer comprehensive coverage to employees for the first time also would benefit, by reducing the turnover caused by uninsured workers' quitting at the first opportunity to take jobs with health coverage.
If Congress trims the generous subsidies it is considering, the added cost of insurance may well show up in higher prices for goods and services of companies now paying nothing. But as conservative economists point out, prices should reflect a business's costs. The issue isn't whether adequate health-care coverage is a freebie. It isn't. The issue is who's subsidizing whom.
by CNB