The Guest Blog

Dunkelberg: Health Care Reform—“Change” Is Not Necessarily Good

William Dunkelberg, Economics Professor, Temple University

First, it was passed on a totally partisan basis, paying no attention to the views of the citizens who were overwhelmingly opposed to this “change”.

This “we know best and have the power” attitude smacks of authoritarianism.

Second, it violated a host of important promises ranging from “transparency” to “no tax increases for anyone who earns less than $200,000” (originally $250,000), to the assertion that health care costs are preventing new firms from being formed (a real reach since it is not mandatory, yet, that firms must provide health care insurance).

Add to that promises that we can keep our health care insurance that we can see any doctor that we want, that premiums will fall and a host of other assertions from the Whitehouse and members of Congress.

Assertions that health care is a “right” are simply incorrect, it’s not in the Constitution and it’s not someone’s “right” if I have to work to pay for it.

Finally, the preferences explicitly shown for trial lawyers and union members, “Obama Buddies”, were offensive. A sad showing indeed. This was not “government of the people, by the people”, just a few people imposing their values on the people.

American healthcare reform
Tom Grill | Photographer's Choice RF | Getty Images

The compensation that a firm can pay is limited to the revenue that a worker can add to the firm’s operation.

In simple terms, a company cannot stay in business paying workers more than the revenue they generate for the firm.

Compensation can then be divided between cash take home pay and benefits and taxes.

If you are worth $50,000 a year and have benefits and health care costs rise, it is hard to keep paying you the same take home cash. This is the pressure that employers and employees face. But this bill does nothing to reduce costs by producing more efficient health care decisions. Instead, $500 billion in benefits have to be taken from the elderly and those who pay for their own but more expensive insurance who must pay penalties.

This is “rationing”, not “rationalizing” the health care market.

Bottom line, this legislation does nothing to make the health care system operate more efficiently which is the “reform” that people wanted. Instead, it brings in millions of new “dependents”, those who will look to government for more handouts and vote for them (hang on for immigration reform, 12 million more votes), and raises the health care bill for the country to be paid for by private sector workers (unless you get a union “break”, stay tuned).

To be sure, many will like the “no pre-existing conditions” provisions and keeping “kids” (??) on the family policy until age 26 (guaranteed to raise health care costs). But these mandates, government definitions of “acceptable coverage” and the penalty structures are likely leading us to a single payer government controlled health care system that will be rife with rationing (how else, for starters, can we cut $500 billion out of Medicare?).

In the meantime, enjoy paying for the 16,000 new IRS “enforcers” out of your income. There will be more taxes to come.

William Dunkelberg is an Economic Strategist, Boenning & Scattergood and Chief Economist, National Federation of Independent Business.