Tuesday, July 24, 2007
The legislation, part of the budget approved by the Democratic-controlled Senate, would provide health insurance to nearly everyone in the state. That would include the estimated 276,000 people - 38,000 of them children - who have been without coverage for more than a year.The Wall Street Journal opines that this will cost them more than they realize.
It would be financed by a 9% to 12% tax on employer payrolls and a 4% tax on workers' wages.
In exchange, employers would be freed of the cost and hassle of providing health benefits to their employees. Instead, people would have their choice of health insurance plans overseen by a state authority.
Proponents use the familiar argument for national health care that this will save money (about $1.8 billion a year) through efficiency gains by eliminating the administrative costs of private insurance. And unions and some big businesses with rich union health plans are only too happy to dump these liabilities onto the government.The plan has both an HMO and a fee-for-service component. The latter is needed for the areas where HMOs do not exist, such as southeastern Wisconsin. But who sets the rate? Even the proponents have no answer to this.
But those costs won't vanish; they'll merely shift to all taxpayers and businesses. Small employers that can't afford to provide insurance would see their employment costs rise by thousands of dollars per worker, while those that now provide a basic health insurance plan would have to pay $400 to $500 a year more per employee.
The plan is also openly hostile to market incentives that contain costs. Private companies are making modest progress in sweating out health-care inflation by making patients more cost-conscious through increased copayments, health savings accounts, and incentives for wellness. The Wisconsin program moves in the opposite direction: It reduces out-of-pocket copayments, bars money-saving HSA plans, and increases the number of mandated medical services covered under the plan.
So where will savings come from? Where they always do in any government plan: Rationing via price controls and, as costs rise, waiting periods and coverage restrictions. This is Michael Moore's medical dream state.
The plan has been rushed forward by the state's senate Democrats, who may not be serious about passing this but rather wanting to get health care on page one in Wisconsin during a slow news cycle. Still, it's not the kind of news they should want. Sean Hackbarth notes the WSJ editorial:
Company executives who read the editorial are putting notes in the backs of their minds to remind themselves not to bother moving to Wisconsin. That�s what happens when politicians threaten to almost double state taxes in an already high tax state. You almost wonder if State Senate Democrats are on the payrolls of Chambers of Commerce for Minnesota, Illinois, Iowa, and Michigan. Passing �Healthy Wisconsin� would be a boon for those states. All at Wisconsin�s expense.Oh but Sean! Nobody ever moves because of taxes! They love your state. They'll gladly stay and
China is moving towards capitalism, Wisconsin is running away.