Who Pays?

A small-business owner was polled on his reaction to the Clinton health-care plan. "Love it," he replied. "Today I pay for my employees' health insurance. Under the new plan, the government will pay." Like many Americans, this businessman is highly confused about what the administration's health plan really means. Under the new plan, providing health insurance will no longer be optional for employers, it will be mandatory. And the minimum benefits package is much larger than what most companies currently offer. Which means most companies will pay more, not less. Of course, President Clinton is promising that it won't cost more-that costs will be reduced through a system called "managed competition." But the irony is we've already tried managed competition. In fact, that's one of the problems plaguing our current system. Clinton's version of managed competition would require all Americans to join large collectives called Regional Alliances, which would negotiate with insurance companies for lower premiums. But most Americans are already tied into large collectives-namely, their employers. And premiums are not lower. In fact, that's a major reason premiums keep going up. Malcolm Forbes, Jr., president of the Forbes company, explains why. Imagine what would happen, Forbes says, if we had the same system to cover food costs-if money were deducted from your paycheck every month for food insurance; then, every time you went to the supermarket, you gave the cash register receipt to your employer, who in turn submitted it to the insurance company for a claim. What would happen to food prices? They would soar-because the same amount of money would be deducted from your paycheck every month whether you economized or not. You wouldn't have to care whether a bottle of soda cost $1, $10, or $50. This is precisely what has happened in health care. If we want genuine reform, we need to build competition and accountability back into health insurance. We need a system that encourages families to read the price tag before they buy. The ideal would be a revision of the tax code so that individuals and families-instead of employers-could use pre-tax dollars to purchase health insurance. Today most of us have to take whatever our employer offers. But if we were purchasing insurance with our own money, we would shop and compare for the best bargain. We could still form larger groups for greater leverage with insurance companies, but it would be by choice, not by government fiat. The practice of tying insurance to employment began only after World War II, and it's obviously not working. But any reform effort needs to treat health care like any other industry-working with basic economic forces, not against them. The most potent forces for reducing costs are consumer choice and accountability. Accountability. That word has a distinctively biblical ring to it. The best strategy for reform is giving families a chance to examine their own needs and count their own costs- empowering families to be wise stewards of the gifts and resources God has given them. This is good biblical teaching . . . and it's good economic policy.

12/28/93