Given the hype surrounding the U.S. House's passage of the Affordable Health Care for America Act (H.R. 3962 - NOTE: this is a link to the .pdf of the whole Bill and it is large) one would think the Bill is now the law of the land. It is not.
The House's Bill does not correspond to the version prepared for debate in the U.S. Senate. The Senate may or may not pass their version, it may be subject to a filibuster, and, once passed, will need to be reconciled with the House version. In other words, passage in the House was important, and a first step, but far from being an overhaul of the U.S. health care system.
The House Bill exempts most small businesses from the health insurance mandate. Businesses with less than $500,000 in payroll would be exempt and there would be graduated penalties for non-compliance for businesses with $500,000 to $750,000 in payroll. Unfortunately, for small businesses, the availability of an exchange program is gradual: in 2013 employers with less than 25 employees could enter such exchanges and that gradually increases over the next years to include larger employers.
Also, the promise of insurance companies being allowed to compete across state lines was eviscerated in this Bill. The Bill calls for the creation of "compacts" where states could choose to allow out of state insurance companies to compete. However, state legislatures are left with the power to approve such competition. Experience dictates that means no competition.
I, like anyone who reads the Bill, can find some truly innovative ideas, some terrible pork giveaways, some really rotten ideas, and some expensive things that just don't belong. But that is the process and this is a first step.
Good article, but just out of curiosity, are you an attorney? Forgive me if I am reading to much into your comment, “I, like anyone who reads the Bill….” However, that comment appears to be a little presumptuous if you meant that you can actually predict how this legislation will be interpreted. A single paragraph of law can be quite convoluted, much less a 2000 page document.
Lawyers certainly ought to be happy about more legislation, but a capitalist (at least a capitalist who does not plan on jumping in bed with the government), an economist, and a businessman should not be happy about THIS legislation.
The remainder of my post states that anyone reading the bill can find the good, the bad, and the ugly, from their subjective viewpoint. I never claimed predictive interpretive powers. I have no idea what your comment about lawyers being happy about more legislation means. And, I disagree that a capitalist or economist “should not be happy” about this legislation. Health care reform has the support of many, many economists. As to U.S. “capitalists,” they compete in a world market where their competitors from China, Japan, Europe, and the like, have public health care systems that act as huge trade subsidies to the competitor. That is, on a wage basis, the U.S. company cannot compete because the foreign company benefits from a publicly funded health care system. It is a myth that “capitalists” in the U.S. do not like “government” support. From a publicly funded interstate system, an air traffic system, supported public engineering and scientific research, publicly supported colleges, a rail system, an agri-economy heavily subsidy dependent, and numerous other examples (including some really ridiculous subsidies to companies owned by foreign holding companies) there is a good deal of our tax dollars going to support businesses, there are many government mandates regarding safety, health, and necessary risk avoidance (car insurance, workers’ compensation, social security), that to suggest that health care reform is some vast plan to force capitalists to jump in to bed with government is not really accurate.
Businessinsure,
Thanks for the response. The principal of the American system has always been about incentives: allowing a person to own something can instill a good sense of pride in that person, encouraging him to protect it, improve upon it, and nurture it; allowing competition (lawful competition) promotes hard work, productivity, and is healthy for the consumer and the entrepreneur. Certainly there are evils that come along with each of those concepts, but that is true for any system that emphasizes anything without respecting the moral law. Therefore some argue that America has been tainted at least slightly by such evils (Lincoln and his railroads, Rockefeller and oil, and J.P. Morgan and the current Federal Reserve).
Ignoring the latter problem for the time being, the ingenuity of the entrepreneur is not to be underestimated, and competition is healthy for America
As long as the government continues to reward its entrepreneurs by giving them ownership over their companies and its natural and civil fruits, the entrepreneurs will produce unique services at a lower price for the consumer.
Yes, classical and modern economists (including those who are conservative) hold to the view that (despite the ingenuity of the American entrepreneur), the Government should offer a select few services, services which:
- are necessary to secure the safety of the people and promote law and order (such as armed forces, FDA, police)
- produce benefits that unarguably, intensively, and unavoidably extend even to those who are neither paying for nor are directly using the service (such as interstate/air traffic systems).
- require a large amount of funding and are necessary but are not profitable enough for private investors to want to invest in it (public alert systems, and therefore, public radio).
Regarding public colleges, those, regretfully, are supported by many “conservative” economists. But that is because they do not want to bite the hand that feeds them. They claim public education falls under number two (2). They claim that having an informed populace is beneficial for society as a whole. Which, it is. However, I question whether the amount of money being pumped into the system is paying off for society! But that is another issue.
As for public health care, it fits under none of the criteria I have listed. Rather, it is yet another area of the American market over which the government is trying to seize control. I do not doubt the administrations good will. But good will alone does not make the action a sound one. If as you say, our health care system is competing on a global market, then that will drive the prices of the health care down quite naturally, without any help from the government. As stated before, the American entrepreneurial spirit is resilient; it will be able to persevere against such competition (assuming it has the aid of America’s Intellectual Property police behind it). But even if we can not compete on a mass scale, the industry will be restructured by the great invisible hand into a boutique market. What is wrong with that?
As for the political side of things and my suggestion that, as you paraphrased it, “the health care reform is some vast plan to force capitalists to jump in to bed with government,” I was wrong for making such an accusation. I have no proof for it and should not have said it.
Again, it was an informative article, but I just do not want there to be a next step in congress. I want them to stop stepping towards passing this and start stomping on it: the bill, the brakes, anything but the gas!