Friday, October 22, 2010

ObamaCare may give most employers incentive to drop insurance

Philip Bredesen has an interesting thought experiment and op-ed on p A17 of the Oct. 21, 2010 Wall Street Journal, “ObamaCare’s Incentive to Drop Insurance”. He is from Tennessee (like the late Libertarian Party candidate Harry Browne) and claims that his home state could reduce costs by over $146 million by “using the legislated mechanics of health care reform to transfer coverage to the federal government”.

In 2014, the rules would allow people without workplace provided health insurance to buy heavily subsidized health insurance from the exchanges. He also pretends he is a startup company and runs the numbers on not offering insurance, but paying employees more and paying the fines, and says he comes out ahead by not offering it. Likewise, employers have a real incentive to drop retiree health insurance. He puts his argument in terms of game theory, and visualizing the world through your opponent’s eyes – a kind of constructive empathy.

Personally, I've always thought that providing health insurance was a competitive burden on employers (the opposite of how it was during WWII), when compared to overseas companies, who have governments that offer heavily subsidized health insurance amount to or approaching single payer systems.

If I were to start a movie production company, I'm aftaid that Bredesen's thought experiment would hold for me. It's difficult to deal with people's issues as an employer; it's easier to outsource them.

The link for the story is here.

Ironically, Patrice Hill of the Washington Times on Thursday played devil’s advocate with the Tea Party calls for drastic spending cuts to control debt (like in Britain) admitting that one could introduce depression; after all, solving basic problems like Alzheimer’s research can put a lot of people to work. TWT link is here.

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