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1) Government Shouldn't be in the Health Care biz [by Anonymous on March 24, 2005]
Proposals in the legislature would create a Small Business Assist Program within the Basic Health Plan. One proposal under consideration (SHB 2069) would ultimately add more than $26 million each biennium in new public spending.

Any approach to expand government-directed health care to small businesses raises a number of concerns and is not the best policy approach for making health care coverage affordable to small businesses.

First, the Basic Health Plan, like state government in general, is overstretched and is having trouble meeting the obligations it has taken on already. In the coming biennium the state faces a $1.5 billion deficit between the rising level of tax revenue and planned increases in public spending. Although tax revenues increase nearly every year, the state is chronically short of money, because the scope of the state’s commitments consistently expands faster than citizens can pay new revenue into the treasury. Expanding the BHP in an effort to assist small businesses represents a significant expansion of the state’s pledge of future services, at a time when the state does not have the financial resources to fulfill even existing promises.

Second, an expansion of a government-directed health care program will discourage small employers from providing health coverage on their own. Although that is not the bill’s purported intent, if passed, this legislation will create a real-world disincentive for employers to offer coverage to their workers. After all, if the state has committed to provide subsidized health coverage, it makes little sense for small employers to take on the risk, expense and administrative cost of offering coverage. The result will be a decrease in private employer-based health coverage, just the opposite of what the bill intends. (The bill states, “it is the intent of the legislature to expand, wherever possible, the availability of private health care coverage and discourage the decline of employer-based coverage.”)

Expanding a public program so the government functions as a tax-funded insurance company in competition against its own citizens is not a sustainable way to make employer-based health coverage affordable. This policy approach is doubly unfair because the Basic Health Plan does not have to pay the same business taxes, cover the same mandates or comply with the same regulations and oversight as do private insurers.

Washington has a health care market that is only now recovering from the failed “reforms” of the early 1990s. This is not the time to discourage private insurance in our state. Instead lawmakers should encourage vigorous private sector competition by allowing new, low-cost insurance products to assist small businesses. As in other essential areas of life, like food, housing, and transportation, the competitive private market provides abundance, high quality, affordable prices and wide consumer choice.

Finally, getting government into the insurance business moves in the wrong direction because it does nothing to reduce the tough tax and regulatory burden that the state places on its own citizens, which in turn makes access to health care less affordable. The small business exemption to the Business and Operating tax is not indexed to inflation and has not been updated for more than ten years. Recent research shows the accumulated health care mandates imposed by lawmakers over the years adds 15% to 20% to the cost of health insurance. Basic-value, or “bare-bones,” health insurance is not legal in Washington. The state’s workers’ compensation system is a mandatory government monopoly which denies small employers the ability to shop competitively for workers’ comp. insurance. (In Idaho employers can choose among more than 120 companies providing quality workers’ comp. coverage.) Heavy regulations make individual and small group Health Savings Accounts much more expensive in Washington than in other states.

Small business owners from across the state have told us through our Small Business Project that the best way to assist Washington small business owners is to reduce some of the 49 mandates the state imposes on every insurance policy sold in the state, allow private insurers to offer basic health coverage, streamline business fees and regulations, and increase access to affordable small group Health Savings Accounts.


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