Why do employers want to continue providing health-care benefits?
One of my standard questions when I talk to business types is why does your business, or any business, want responsibility for your employees' health-care coverage? After all, businesses aren't interested in their employees' housing decisions, or their choice in cars. Why health care?
There are a lot of answers to this question, most of them unsatisfying. But that may be because it's the wrong question. If we were rebuilding capitalism from scratch, employers may well decide to let someone else worry about health care. But the relevant question today is why they want to keep offering health care, rather than embracing one of the alternative proposals on the table.
A recent conversation provides a possible answer. Employers, this observer said, admit that this is a bad system, but at least they've got their hands on the steering wheel. If the government takes control of health care, then all decisions will be made by politicians and the electorate. And politicians and the electorate will continually want more generous benefit packages. But they won't want to pay for therm. So they'll raise taxes on businesses and they'll raises taxes on the rich. The business community isn't a big fan of either approach.
When you read polls like this one, showing that the only popular way to pay for health-care reform is to tax the rich, it's easy to understand why they're scared. On the other hand, their understanding of the politics seems flawed. If employers backed alternative funding mechanisms (ending the tax exclusion on health benefits, for instance) and could persuade some Republicans to provide the Democrats cover, then they could have their preferred financing mechanism. Forcing Democrats to go it alone with no extra votes providing a margin of error means they'll inevitably congregate around the most popular financing mechanisms, even if those aren't the best financing mechanisms.
Photo credit: Brendan Hoffman/Getty.
November 18, 2009; 10:21 AM ET
Categories: Health Economics
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