Just when you thought Washington couldn’t get more partisan and confused, along comes the phony tempest about whether President Obama’s health-care reform will lead employers to drop coverage once the new insurance exchanges open for business in 2014. The GOP thrust and Democratic parry here are so at odds with any sane view of the national interest as to make one shriek to the skies, “Can’t we have a third political party? Pretty please?”
In case you’ve been too busy with the Anthonys (Casey and Weiner) to keep up with your health-care wonkery, here’s what I’m talking about. Some recent reports have suggested that many more employers will drop coverage once the exchanges are launched than the administration has predicted. (Disclosure: McKinsey and Co., a consulting firm where I’m an adviser for part of my time, published the results of a survey that partly looked at this issue, a project with which I was not involved.)
Matt Miller
A senior fellow at the Center for American Progress and co-host of public radio’s “Left, Right & Center,” Miller writes a weekly column for The Post.
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Overnight, every Republican with access to a microphone or the op-ed page has pounced. Voices from Karl Rove to former John McCain adviser Douglas Holtz-Eakin to former Bush aide Larry Lindsey have rushed to claim that these phalanxes of Americans poised to be “dumped” into “government-run” health care unmask Obamacare as even more of a fiendish socialist budget-buster than they suspected.
Now, I don’t pretend to know how many employers will drop coverage if some workers are offered subsidies to help them buy private coverage on their own. In Massachusetts, not many employers have dropped; yet it stands to reason that if the “penalty” large employers would pay for not offering coverage ($2,000 per worker) is less than the cost of providing that coverage (which it is), they may very well drop, at least over time. But smaller firms will be getting government subsidies to help them expand coverage. In the end, the decision to drop will probably depend on what other firms competing to attract talent choose to do, and how all firms adjust the way compensation is divvied up between wages and benefits as a result.
But if these issues won’t be settled for a few years, one thing is certain right now: It would be a fantastic thing — not some calamity — if more people got coverage from the exchanges instead of from their employers. Yet both parties act as if it would be a disaster.
Republicans used to know better. The policy centerpiece of John McCain’s presidential campaign was a call to move past employer-based coverage by converting the tax subsidy for employer-provided care into a health tax credit for individuals.
What’s more, the whole GOP line about Democrats “dumping” people into “government-run” care is preposterous. For starters, the exchanges offer choices from among competing private carriers. And most people will feel more “liberated” than “dumped.” The United States remains the only advanced nation in which individuals lack access to group health coverage (with affordable group rates and no bar for preexisting conditions) outside the employment setting. As a result, health-care “job lock” afflicts millions, which is bad for entrepreneurship, worse for economic dynamism and awful for peace of mind.
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