Monday, July 7, 2014

Unintended consequences


Two apparently unrelated news reports caused me to think about healthcare in the US:

  1. Insurance companies that sell health insurance have increased their profits since the Affordable Care Act went into effect.
  2. The Supreme Court has decided that narrowly held corporations such as the Hobby Lobby do not have to include contraception options in the healthcare insurance that the company offers its employees when such contraception violates the owners' religious beliefs.

Obamacare is good for business, according to John Cassidy ("Why Can't the Haters See Obamacare is Good for Business?" Fortune, May 1, 2014, p. 72). Cassidy eviscerates critics who argue that the healthcare legislation will hurt small business. He observes that healthcare stocks, which comprise a sixth of the US economy, are up sharply over the last five years and that 26.6 million of the nation's 27.2 million small businesses employ fewer than 20 people. Thus, the healthcare law actually works to the advantage of these businesses, removing an existing incentive for small business employees to seek a job with a larger employer in order to obtain healthcare insurance.

Administrative costs total in excess of 25% of US spending on healthcare. Providers spend enormous amounts to bill insurers, each of which has its own forms, policies, reimbursement rates, etc. I'm not at all surprised that expanding the number of insured persons has resulted in a significant increase in insurance company (as well as other healthcare related company) profits. Some financial managers now regard insurance company stocks as attractive investments. Dramatically reducing administrative overhead by replacing the current hodge-podge of insurance schemes with a national healthcare plan would save money, even if the national scheme had widespread inefficiencies.

Allowing corporations, such as Hobby Lobby, to tailor the healthcare coverage that it offers to its employees reflects the needless clash between religious freedom and non-discriminatory employment policies that the lack of a national healthcare scheme creates. Employees should not have to choose whether to work for a company or organization based on the types of healthcare that the organization regards as moral. Pending court challenges by Roman Catholic organizations that do want to pay for birth control, abortion, and other medical procedures to which they object are also part of this problem.

Individuals reasonably deserve the freedom to decide for themselves what healthcare they deem moral. This is a personal choice. A person who does not want a blood transfusion on religious grounds (and there are religious groups that view blood transfusions as immoral) should not have the prerogative of de facto coercing his/her employees to subscribe to the same view by establishing a company policy that the company will not pay for healthcare insurance that covers blood transfusions.

Establishing a national healthcare system avoids this problem. The government would pay for coverage (of course, taxpayers will pay indirectly for healthcare through their taxes, not unlike the current approach in which healthcare funding comes from taxes, insurance, and private payments). Then individuals would decide what healthcare they personally want. Such a system would appropriately separate employment decisions from healthcare decisions.

Until that happens, Hobby Lobby and other discriminatory businesses should not anticipate doing business with me.

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