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Monday, August 13, 2007
Insurance mandates hurt business
The Atlanta Journal-Constitution
Just the number of employees identified by the Department of Labor as working for small businesses in Georgia total 1.5 million. Another state department, relying on incorporations, puts the number at 967,000.
In either case, these are staggering numbers for a state on the verge of launching a three-way pact with small-business employers and their workers to buy health insurance. Using $20 million saved from better management of Medicaid and other federal money, altogether totaling $50 million, Gov. Sonny Perdue hopes to start sign-ups next July 1. The $50 million, targeted to workers earning up to $62,000 per year for a family of four, is projected to cover 30,000 employees. The number of eligible uninsureds is thought to be 380,000.
They’d be offered at least two options, one of which is the equal of the State Health Benefit Plan for public employees. Another would provide less generous benefits at a cheaper cost but would still require all the mandates that legislators have heaped on that drive up the cost of coverage.
David Raynor, state director of the National Federation of Independent Business, noted in testimony last week before a legislative committee that small businesses unable to afford coverage were drawn to a 2005 bill authored by State Sen. Cecil Staton (R-Macon). His bill would have allowed the little guys to purchase basic policies free of most add-ons mandated by previous legislatures — coverage for contraceptives, for example.
As it went through a Republican-controlled Legislature, many of the mandates were added back, “eliminating the cost benefit,” said Rayner.
“Not one single policy has been written in the state of Georgia as a result of Senate Bill 174,” said Staton on Monday. “After some interest groups got to adding back in the mandates, it essentially gutted the bill.” By some estimates, said Staton, a policy rid of legislative medicine would have been 15, 20 or even 30 percent cheaper. “Just because somebody can’t afford a Cadillac, you shouldn’t be able to say they can’t have any transportation at all,” he said.
Eliminating mandates pushed by interest groups would undoubtedly help make insurance affordable for small businesses.
Allowing them to buy policies anywhere in the nation, without regard to Georgia’s mandates, would make it more affordable, too.
Another bill that would have helped was introduced this year by State Rep. Tom Knox (R-Cumming). It encouraged consumers to create health savings accounts combined with high-deductible health insurance plans, one of the key elements of Perdue’s small-business proposal.
The policies were made more attractive by eliminating the state tax on premiums. Perdue vetoed it because that provision would “cost” $61 million over six years. Review of the tax should come “as part of — and not independent from” comprehensive health care transformation, he wrote.
Health savings accounts, combined with high-deductible policies, should be aggressively sold to the young, the largest bloc of uninsureds. According to Census Bureau data, 11.2 percent of those under 18 weren’t covered in 2005. It was 30.6 of the 18-24 age group, and 26.4 of the 25-34. Then it drops to 18.8 for 35-44 and 13.6 for the 55-64. Only 1.3 percent those over age 65 aren’t covered.
Incidentally, too, there’s a gradual shift onto the government rolls. In 1992, President Bill Clinton proposed to make 55-64 early retirees eligible for government-subsidized health care. At the time, 17 percent of them relied on taxpayers. It’s now up to 19.1 percent.
Any tax dollars spent to create a new category of public assistance should go primarily to encouraging innovation and competition, not to encourage greater reliance on government.
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Happy? Karl Rove’s gone.
The Atlanta Journal-Constitution
Thinking Right’s notes from the weekend. Pick a topic:
• Former Massachusetts Gov. Mitt Romney posted a solid win in the Iowa straw poll Saturday, prompting former Wisconsin Gov. Tommy Thompson, who finished sixth, to throw in the towel. If forced to predict now, I’d bet on Romney to win the nomination, though Rudy Giuliani’s substantially ahead in the polls, nearing 30 percent support while Romney is about 10. Romney grows on you. But if there’s another terrorist attack in this country, Giuliani’s the guy. Thompson was a better governor than his performance in the presidential debates would suggest. The dye job didn’t help, either, if this high-minded corner is allowed to be petty about a Republican’s hair.
• Happy? Karl Rove’s gone. Partisans in Congress and in the media can now focus all of their energies on Vice President Dick Cheney as the evil genius manipulating George W. Bush. Rove’s off to write a book. What Bush really needs now is a veto pen, not political advice. Veto, veto, veto.
• Former Panamanian dictator Manuel Noriega is due to be released on Sept. 9 from prison, where he’d served 18 years for drug trafficking. Panama doesn’t want him back. But it’s clear he still has friends there. Here’s what having buddies in high places can do:
Noriega was sentenced in absentia in Panama to 60 years in prison for embezzlement, corruption and murder for crimes committed during his six-year reign. Panama’s now banned such trials and set the maximum he could serve at 20. But, under legislation passed in January, he gets to deduct the 18 years he served in the U.S., so the most he could serve is two. And the law allows anybody over 70 to apply for house arrest rather than prison. Noriega’s 72. Better to send him to France, where he’s wanted for allegedly laundering about $3.15 million in drug profits. The case is up for a hearing in Miami today.
• One reason education reform never really gets rolling is that the education workplace unions are masters at planting poison pills. Case in point: Alabama set out in 2004 to “reform” the teacher dismissal process. A provision inserted into the law allows teachers fired for cause to continue getting paid until an arbitrator upholds their dismissal. But a teacher fired for alleged criminal conduct can’t be reviewed by an arbitrator. So a teacher facing criminal charges of raping a student, fired in 2005, has been paid almost $100,000 since — and remains on the public payroll. Conservatives should think in terms of changing the system, not tinkering with it. Tinkering doesn’t work. It doesn’t last.
