Healthy Skepticism of the Governors Health Insurance Plan
I commend the Governor for suggesting a solution to a tough problem. I just don’t think any economic theory supports the outcomes he desires. And I definitely don’t believe his is a "centrist" approach. A centrist approach would be devoid of tax increases, employer mandates and mandated spending by providers, and be full of market based incentives to lower the cost of private health plans.
My firm handles over $40 million in health and health related business, so I follow health insurance and health care trends as closely as possible. Diagnosing the reasons for 6.5 million uninsured workers isn’t that tough. Employer paid health plans are expensive. Treating doctors and facilities are grossly underpaid by government funders such as Medicare, Medicaid and MediCal. Those unreimbursed costs are mostly transferred to the private health plans when they contract for services with the health care providers. Thus, the "hidden tax" on us is primarily caused by the government because the cost of health plans is inflated, and out of reach to many employers, due to government rationing of health care dollars.… Read More