Political scientist Jacob Hacker claims in the Washington Post that the “Blue Dog” Democrats’ opposition to Obama’s “public plan” is not in the interests of their constituents – particularly farmers, ranchers, small business owners, and low- and middle-income workers, who would supposedly benefit from premium assistance and from the cost reductions he claims a Medicare-like public plan for the non-elderly would bring, as well as from the requirement that “all but the smallest of employers make a meaningful contribution to the cost of coverage.”
On the contrary, it is precisely these provisions that would raise health care costs and harm the most economically vulnerable workers and entrepreneurs, while increasing health care costs for everyone. The requirement that “all but the smallest of employers make a meaningful contribution to the cost of coverage” is to be implemented by requiring employers who don’t provide health insurance to pay an 8 percent payroll tax – but the bill specifically states that this tax will NOT be credited toward worker’s premiums, even if they sign up for the public plan. So it won’t do workers any good in terms of providing them with health coverage – plus, as a tax on employment, it will force pay cuts and layoffs on those who can least afford them. It will kill the jobs of middle- and lower-income workers at a time when unemployment is already at historic highs, and do nothing to help those who retain their jobs to pay for health coverage.
Furthermore, there is no evidence that a Medicare-like public plan for the non-elderly would bring about any cost reductions. Hacker has claimed in the past that Medicare has lower administrative costs and slower cost growth than public plans, but these claims do not stand up against the evidence – in fact, the opposite is true: Medicare has much higher per-beneficiary administrative costs, and creates the illusion of cost control only by pushing a higher share of its ever-increasing costs onto beneficiaries and other payers. Over 90% of the elderly find the need to acquire supplemental private insurance – or sign up for Medicaid – to pay Medicare’s soaring out-of-pocket costs. A Medicare-like public plan for the non-elderly, as proposed, would still leave lower- and middle-income workers with substantial medical bills, and many would find the public plan substantially less adequate than the insurance they have now.
And as for premium assistance, most of the “farmers, ranchers and self-employed workers” that Hacker claims to care about would not qualify for premium assistance – but would “qualify” for the higher taxes imposed to pay for this health care nightmare. If they have employees, they’d be hit by the 8 percent payroll tax to make their “meaningful contribution,” and if their businesses are even slightly successful, they’d be hit by the “income surtax” that we are told will apply only to “the rich.”
Perhaps instead of telling the Blue Dogs what’s best for their constituents, Hacker ought to take a look at the evidence and maybe even talk to some of those constitutents to see whether they want lower incomes, fewer jobs, and higher taxes to pay for high-cost, low-value health “coverage.”