Facts show deep flaws in government’s plan

Small businesses in Colorado are eager to make the case for the right kind of health reform, because we believe the facts about what works – and what won’t – are compelling.

What concerns members of the National Federation of Independent Business throughout Colorado? We are deeply troubled by the effect that the so-called “public option” will have on our competitiveness, our workers and their families, and on our quality of life.

In survey after survey, small business lists the soaring cost of health insurance as a major burden on growth and job creation. That’s why small business has loudly beat the drum for market reforms that address cost, first and foremost.

NFIB has been and remains a constructive participant in the health-care debate. NFIB’s members aren’t against reform; we are against bad reform, which is all that currently exists in legislative language.

The key is reform that fixes what’s broken and doesn’t meddle with what isn’t. For that reason, we believe that the so-called public option, with the government running a new health-care plan, will make existing problems worse, not better.

The immediate concern is installing the government as a competitor with the private marketplace, which could be the first step toward a single-payer, government takeover of the health-care system. What might seem like an innocuous option at first will slowly expand, consuming more and more of the marketplace. Indeed, many advocates of the public option have made it clear that they believe a single-payer system is the ultimate and desired goal.

Basic economics

It’s basic economics. A public plan would eventually undermine private-sector competition because the government would be allowed to set a price that nobody could compete with, leaving purchasers with a single option: the government option.

Even if one believes that the private system and a public option can co-exist, the facts show that a public option will increase rather than decrease health-care costs. Based on historically low reimbursement rates to doctors enrolled in public programs, such as Medicare, costs will end up shifting to private payers to offset the public option.

A study by the Milliman Group found current Medicare and Medicaid underpayments drive up the cost of private coverage for the average family of four by $1,788. For many small businesses, those extra costs are more than enough to drastically affect important business decisions about investing in and growing their business.

In addition, a government-run health plan will drive up the budget deficit, or lead to job-killing tax increases, or both. Claims that a public plan could finance itself are erroneous at best. Eventually, tax dollars would be relied upon, as they are with all other government-health insurance programs.

A recent study comparing the spending in other government health-care programs concluded that costs far exceeded initial expectations. Since 1970, per-patient costs of all health care, apart from Medicare and Medicaid, have risen from $364 to $7,119. However, Medicare’s costs have risen $2,511 more per patient, from $368 to $9,634.

Tony Gagliardi is state director of the National Federation of Independent Business Colorado.

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