As members of the two-party monopoly come together to hammer out a “compromise” on how best to send the health care we have to hell in a handcart, I thought you ought to know a bit about the co-op option; it is, after all, the buzzword being bandied about to replace the less-than soothing “public option” phrase. A co-op is “simply government-run health insurance by another name.” Over to Cato’s Michael D. Tanner:
“Now, if this was really going to be a co-op like rural electrical co-ops or your local health-food store — owned and controlled by its workers and the people who use its services — it would be a meaningless but harmless diversion. America already has some 1,300 insurance companies, so it’s hard to see what one more would add, but it would be unlikely to do much harm.
But these aren’t true co-ops. The members wouldn’t choose its officers — the president would. Plus, the secretary of Health and Human Services would have to approve its business plan, and thus could force it to offer whatever benefits, premiums and reimbursement schedules Washington wants. Finally, the federal government would provide start up, and possibly ongoing, subsidies.
[This is a] ‘co-op’ run by the federal government, under rules imposed by the federal government and with federal funding…
The Senate compromise also drops the job-killing employer-mandate that businesses provide their workers with health insurance or pay a penalty — and substitutes a more regressive employer mandate.
The compromise would have no specific mandate for employers to provide insurance. But any employer who failed to do so would have to pay the cost of all subsidies that the government provides his or her workers to help them pay for insurance on their own.
It is hard to see how this is different from any other employer mandate — except that it will hurt low-wage workers most.
Business owners care about the total cost of hiring a worker, not how that cost is apportioned between wages, taxes, health insurance or other benefits. If they have to pay the cost of subsidizing health insurance for their workers, employers will simply offset the added cost by lowering wages, reducing future wage increases, reducing other benefits (such as pensions), cutting back on hiring, laying off current workers, shifting workers from full-time to part-time or outsourcing.
It will ultimately be the worker who pays the subsidy’s cost. The government will be giving the worker a subsidy with one hand, and taking it back with the other. Does that make sense for any reason other than ‘compromise?'”
The complete Tanner piece here.
Michael D. Tanner is a Cato Institute senior fellow and the author of Healthy Competition: What’s Holding Back Health Care and How to Free It.