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Wednesday, January 13, 2010

Small Biz Health Care Daily: Do As We Say!

As the Obama White House and Democrats in the U.S. Senate and House of Representatives work to come up with compromise health care legislation, it is important to keep in mind what ultimately is going on here.

Proponents say this is all about expanding health care coverage, expanding choices and getting costs under control. Few would disagree with those goals. At the same time, few with an understanding of economics would agree that ObamaCare’s plan to expand the role of government in health care is actually going to achieve these goals.

After all, more regulations, mandates, taxes and government spending do not lead to cost reductions and expanded choices. Quite the opposite.

Consider the issue of insurance exchanges, which are billed as venues where individuals and small businesses could shop for health insurance. The Senate bill would have states establish insurance exchanges. The House bill would have the federal government overseeing a national exchange. U.S. Rep. Louise Slaughter (D-NY) favors the national exchange. Note what the January 13 New York Times reported about Rep. Slaughter’s view on the topic: “Ms. Slaughter said ‘it is really critical’ to have a single national insurance exchange managed by the federal government. ‘If you leave that up to the states,’ she said, ‘some states will not do what we are asking them to do.’”

Insurance exchanges are not about choice and competition. Instead, they are about government managing and politicians imposing what they want on the health care marketplace. These so-called exchanges simply are means for more convenient regulation, not more convenient shopping in the marketplace.

Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council

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