Big Business Supports Screwing Competition

This made me chuckle. 

A group that includes executives from some of the country’s largest corporations, including chief executives of Manpower and Northwestern Mutual Life Insurance Co., has concluded that the system of providing health insurance through employers is failing and must be scrapped.

For those of you liberals who are going to jump on this as some sort of vindication for socialized medicine, I suggest that you look at the motivations here.  Why would “big business” want government-run health care?

Right now, health insurance expenses cost companies a fortune, and it is a cost that continues to go up.  Big businesses tend to provide health insurance for most of their employees - particularly their most expensive employees.  As the cost goes up, it hits the companies’ bottom line.  As the companies try to mitigate the damage to their profit margin, they have to push some of the cost onto their employees, which tends to tick off their employees.  In the end, the companies are forced to either take a smaller profit and absorb the cost, or tick off their employees. 

For big businesses, the notion of government-run health care is a great idea.  The cost that they spend on health insurance now is simply converted to a payroll tax.  It’s roughly the same dollars, so what do they care?  If the health coverage sucks, then what do they care?  Their employees won’t get mad at them - they will get mad at the government.  Furthermore, big businesses tend to have a lot more sway with politicians than they do with the health insurance providers.  With government-run health care, don’t be surprised to see tax breaks for big businesses to off-set the rising costs.

Finally, big businesses would like government-run health care because it would help kill of competitors by increasing the cost to enter the market.  Many small entrepreneurial companies don’t provide health insurance because they can’t afford it - or they provide creative health insurance plans with high deductibles.  By forcing a mandatory 15%-20% cost onto every employee, it makes it more difficult for new companies to get off their feet and challenge the established old companies. 

Once again we have big businesses using their power and influence to try to make things better for themselves while killing off competition.  There isn’t anything wrong with that, but understand where they are coming from.

As I have always said, my opposition to government-run health care is rooted in the inherent loss of liberty when we turn our health care over to politicians, but the opportunity cost in terms of new businesses and innovation is a high cost.  There’s a reason that America’s economy continues to be innovative while the European economies are lethargic.