Independence Day is a time to reflect on the United States and to ask what it is that we really value about our country. Most people would probably list the freedoms that it has usually guaranteed to most members of society. The opportunities for economic success, while not as great as often touted, are nonetheless impressive.
However, some members of Congress were apparently celebrating our system of employer-provided health insurance last weekend. Or, at least that is what they want us to believe.
As Congress starts to delve into the dirt of a health care reform package, the clearest point of conflict is over the existence and structure of a public health care plan. Some members of Congress have thrown down the gauntlet, insisting that they could never allow the public to have the option of buying into a government-run plan.
In addition to the members who just say "no" when it comes to a public plan, there are also members who are willing to allow a public plan, but only if they can be sure that it will not provide real competition with existing private plans. This route involves crippling the public plan in various ways to make it less competitive.
For example, one proposal is to establish a series of health insurance cooperatives, which would be prohibited from acting jointly to maximize their bargaining power. The idea is that a newly formed Nebraska health insurance cooperative, insuring a few thousand people, will not be able to put too much pressure on Pfizer or the American Medical Associations when negotiating prices. It also will not be able to provide much competition for Aetna, Cigna, and the other major insurers.
This is truly bizarre. The United States has employer-provided health care insurance as an accident -- it came about as a way to evade wage controls during World War II -- it was not some grand principle.
It is almost impossible to imagine why someone would consider employer-provided insurance as an end in itself. I say this both as an economist and as an employer. I am going to waste several hours tomorrow discussing my center's health insurance plan with an insurance broker.
It is very difficult to compare the merits of the different insurance plans that we are considering. There is an endless list of conditions that are or are not covered (which can change after the fact). There are also issues about how quickly and consistently the insurer will pay bills. We can ask people with other insurers about their experience, but there is no guarantee that our experience will be comparable.
Of course, our broker is of little use. She will only get paid if she persuades us to change insurers. How much can we trust her?
I am trying to do research and run a think tank. Senator Baucus might think that it is a good idea that I have to waste my time dealing with insurance brokers, but I don't, and I suspect that millions of other small employers feel the same way.
Dean Baker is co-director of the Center for Economic and Policy Research.
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