Many of the proposals in the House and Senate’s health care reform bills should create a lot of good for individuals if they’re passed. More affordable options for the employed and unemployed alike; no denial of coverage for pre-existing conditions; and in President Obama’s call for all employers to either insure employees or contribute to a government plan — the so-called “pay or play” idea — businesses should also benefit.
The business benefits, though, are not as easy to see as those to individuals. On NPR’s Fresh Air, health care writer Jonathan Cohn of the New Republic points out that if businesses are forced to pay either way for health insurance, it will level the playing field. Here’s what happens: If employers don’t insure their own employees, they will have to pay into the government plan, where these uninsured employees will likely have to buy their coverage themselves. So employers will be subsidizing the cost of their employees’ health care that way.
So how does that level the playing field? Pretend there are two grocery stores who provide employee health insurance, Cohn says. One has better product than the other. The one that sells an inferior product can, in the current system, cut costs by getting rid of health care and can thus lower prices on groceries and drive the better grocer out of the game. If reform passes, forcing all grocers to pay for insurance one way or another, the business with the better product will prevail.
Health care reform compelling businesses to compete on their own merits? We dare to dream.