Hillarycare II and Its Problems

Hillary Clinton rolled out her healthcare plan on Monday, which to a great degree is 'Hillarycare revisited' from 1993. She has amended her plan that was doomed to failure 14 years ago, but the supposed 'new and improved' updated version still carries highly problematic features.

The most glaring and obvious problem with Hillary's proposal is that it places the bulk of the burden for healthcare on the backs of U.S. employers. Small businesses and entrepreneurs will suffer the most, many of whom will be unable to withstand such a financial burden.

These will be forced out of business.

Under Hillarycare II, American employers will be required by federal law to provide health insurance to their employees or pay into a fund that helps provide coverage for the uninsured.

The immediate consequence of such a provision is obvious--employers will eliminate jobs.

For example, say I own and operate a small business that relies on 10 employees with minimal skills, working at slightly above minimum wage. If I am suddenly forced to provide healthcare coverage for these employees, immediately I am placed in a terribly unnecessary catch-22. I can keep all the workers, provide the coverage, and go out of business, or I can eliminate eight jobs and keep two so that I can afford to provide them with health coverage.

My business does not make enough money to survive under Hillary's proposal without eliminating jobs.

The only other alternative is to go out of business, meaning that none of the original 10 employees will have jobs.

The American service industry relies on the unskilled, minimum wage worker to keep costs down. Many of these workers are not provided with health insurance coverage. If these employers must now provide such coverage, not only will their personnel costs skyrocket, but they will either pass these costs along to the consumer, resulting in skyrocketing inflation, or they will begin massive layoffs.

It is not the responsibility of the American employer to provide healthcare coverage to its employees. Corporations began this practice during the post-WWII boom years when companies lured quality, dedicated, and loyal employees to its rosters by giving them an incentive package to close the deal.

This way the employees were happy, and the employers had long-term, valuable employees for life.

As American society has become more mobile and as both employers and employees have seemed to devalue the mutual loyalty of the status quo, employers in many cases have no longer felt it necessary to provide health insurance.

By the same token, employees have increasingly felt no loyalty to the company at all, and will skip from job to job and company to company, depending on who makes the best offer at the time.

But the bottom line is that nowhere is it written in stone that U.S. companies have any obligation whatsoever to provide health insurance for their employees. And if they are forced by federal law to do so, look for massive layoffs as jobs are eliminated in an attempt to contain spiraling costs.

The way to address this problem is to make it attractive for employers, even small business owners, to provide health coverage. One way to do that is to allow small business and single-employee/owner entrepreneurships to buy into group insurance plans, thus vastly reducing the costs of providing the coverage.

A second problem inherent in Hillarycare II is that there is absolutely no mention of the fact that individual citizens should be encouraged to take some personal responsibility for their own healthcare. Those of us with a libertarian bent have long advocated for personal medical spending accounts to which workers and individual citizens can contribute.

These accounts can be opened through one's employer, and a predetermined amount, decided on by the employee, is deducted from one's paycheck each pay period to go into the account.

The value of these individualized healthcare spending accounts is that it teaches sound principles of economics and personal responsibility. Hillary's concept of health insurance takes the matter totally outside the realm of personal human responsibility and places it squarely in the realm of the federal government and employers.

If ever there were a concept that teaches by example that the world owes a person a living, and insurance to boot, then this is it. Why not just go ahead and say that U.S. employers owe their workers a new car every four years? And if for some reason the employer can't do it, then the government will.

These kinds of ideas originate in the land where candy canes grow on trees and where where the rocks yield rich Hersey's chocolate.

Finally, Hillary's proposal mandates that those citizens who cannot afford health insurance be covered by the federal government. This would essentially be an expansion of the current Medicaid program.

Several questions must be asked of the candidate lest such a thing be allowed to go unchallenged. First, what are the criteria to be used to determine whether or not one is able to afford health insurance? Who sets such criteria? What kind of bureaucracy will need to be put into place to manage such a massive expansion of government power?

Another vital question revolves around choice and empowerment. If and when these who cannot afford health insurance are placed on the rolls of a government insurance program, do they get to choose their own physician? Can they change physicians if they are not happy?

These issues must be addressed before a significant portion of the population, if not the majority of the population, will support such a mammoth plan such as Hillarycare II. As we have noted many times, we are open to methods of making provision for those who lack health insurance, but so far we have not seen a plan we could support.

So far, the plans put forth by the likes of Hillary Clinton, John Edwards, and even Mitt Romney run a high risk of making the dog deathly sick in an attempt to heal part of its tail.