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Tuesday, December 08, 2009

Small Biz Health Care Daily: A Health Care Compromise?

The word “compromise” has been getting a workout in political and media circles of late when it comes to the push for more government in health care. But there isn’t any true compromise or debate going on right now. Instead, it’s all about Democrats in Congress wrestling over the shape of big government health care.

The latest ideas being offered are: 1) the Office of Personnel Management running a new national health plan by contracting with various private insurers, 2) Medicare eligibility being expanded, starting at age 55 rather than at 65, 3) Medicaid covering individuals with incomes up to 150 percent of the poverty level, and 4) mandating that insurers spend a certain percentage – around 90%, according to the New York Times – on clinical services, thereby limiting profits.

The effects of such ideas are clear. Government running a new plan means expanding government’s power and control in the health care marketplace, and exposing taxpayers to added costs. Expanding Medicare and Medicaid means socking taxpayers with huge cost increases, as both programs have experienced runaway costs over the decades. And limiting insurance company profits means limiting innovations, investment and competition.

For small businesses, all of this would translate into higher costs via taxes and reduced choice in the marketplace.

Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council

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