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Sunday, January 22, 2006

Henry David Thoreau on healthcare

Recently, the Maryland legislature passed a law requiring any company with more than 10,000 employees to spend at least 8% of its payroll on healthcare or pay the difference to the state's welfare system.

Sheldon Richman discusses the case at http://www.fff.org/comment/com0601f.asp. Here's an excerpt (HDT fans, keep on reading!):

Companies don’t scrimp on medical benefits because they are stingy. They do so in part because medical care is increasingly expensive and workers may prefer cash to insurance. Government intervention is the reason. The best way to make health coverage cheaper is for government to quit inflating the price of medicine through burdensome regulation and competition-throttling licensing. As medical costs came down, so would the price of health insurance.

But we should go further. Were it not for the income tax there would be no good reason for employees to tether themselves to their bosses with health insurance. Better to take your compensation in cash and buy the health coverage best for you, than to let your employer make the decisions. But the tax laws push many people into often-lavish employer-provided insurance. This raises the price of medical care, pricing other people out of the market and leading to problems like “job lock,” in which workers are afraid to change jobs because it might mean adverse changes in coverage. Working for someone else can be unpleasant enough. Why mix health insurance into the relationship?

Once again politicians have tried to fix a problem that they helped cause. The same people who made health insurance artificially expensive by mandating coverage for services most people don’t want now are trying to force Wal-Mart to clean up their mess. When will they learn that, as Henry David Thoreau put it, “this government never furthered any enterprise but by the alacrity with which it got out of the way”?


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