Monday, August 06, 2007

Still more questions about single payer in a single state

As I have blogged before, there seems to be no end to the problems associated with the Democrat's "Healthy Wisconsin" scheme for a single payer health plan. Some of them have to do with the difficulties of enacting such a plan in a single state. One such difficulty is the potentially significant adverse impact on the national competitiveness of Wisconsin businesses.

Another has to do with ERISA compliance and the possibility that HW would be preempted by that federal statute (which governs, among other things, employer-provided health care.) Courts have found that state laws are pre-empted by ERISA if they "relate to" such a plan, For example, when the state of Maryland attempted to require Wal-Mart to spend at least 8% of its in-state revenue on employee health care, a federal court struck down the law as pre-empted by ERISA.

Over the weekend, I got a look at a memo from the Wisconsin Legislative Council, prepared at the request of Rep. Leah Vukmir, discussing potential ERISA preemption. The memo raises the question but does not really attempt the analysis that might be required to answer it.

I don't know what that answer would be. It does seem to me that, unless multi-state employers could exclude Wisconsin employees from their national plans, pre-emption seems likely. ERISA does permit employers to operate separate plans but there are all sorts of restrictions on when you may do so.

One of the problems, it seems to me, may be the potential need for employers to supplement HW to provide benefits equivalent to their national plans. Supporters of HW assert that it will provide the "same good benefits" that state employees receive, but that's not obvious. The HW board will be empowered to modify those benefits to, among other things, hold down the cost of health care.

Given that the payroll tax is capped (and there will be political pressure not to raise the cap), the prospect that benefits will have to be reduced to contain costs seems like a real possibility. That possibility is made more likely, it seems to me, by the requirement that the plan provide coverage for mental health services and drug and alcohol treatment to the same extent as it provide coverage for physical conditions. (Does the state provide that for its employees? I doubt it.)However desireable such coverage might be, it will be very expensive.

Even if a need to supplement doesn't result in ERISA preemption, it may will raise the cost of employing people in Wisconsin for those employers who pay less than 12% of payroll for health care. Because other states will not impose the same tax, those jobs can go elsewhere.

Supporters of the plan will argue that other employers - those who currently pay more than 12% of payroll - may be attracted o Wisconsin and so they might. Some businesses may win under HW. But I am not sanguine about distorting the market and hoping we come out ahead, Winners, moreover, would seem to be those employers who provide health care for relatively lower paid employees, Losers are those that do not provide health care or who employ a higher paid work force. I see no reason to believe that the net outcome will be positive.


Anonymous said...

The US medical cost is 2.2 trillion dollars per year or averages over $7,000 for each man, woman and child in Amercia.

What do we get;
1. Prescription drugs cause 700,000+ emergency room visits annually.
2. The three leading causes of death in America:
a. Heart disease
b. Cancer
c. Doctors and their drugs
Source: Journal of the American Medical Association 10/18/06; 296(15): 1858-1866

This is the results of the unregulated free market monopoly system we currently have. We would just get more of the same with the Torinius and Republican plan.

Anonymous said...

It's not a single-payer plan. No matter how many times you say it, it's not.

Every time you repeat that, I have to wonder what you teach future lawyers!

And every time you repeat that, I know to backlink to another blog. Too bad; I have found your insights interesting on some matters.

But as for your basis in fact? Now I have to figure that your insights are flawed, based on lack of facts. (To put it nicely.) Bye now.