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How healthcare regulation can help big business
By: Timothy P. Carney
Examiner Columnist
06/17/09 10:29 AM EDT
One of the arguments for government-run health care is that our current system, in which most of us depend on our employer for health insurance, keeps you tied to your current job. Certainly, there would be some economic gains from a healthcare system that removed additional barriers to mobility, such as increased entrepreneurship, a more robust labor market.
Another way to promote the same mobility: remove the government-created advantage employers have in health care--exactly what John McCain wanted to do, and exactly what caused Barack Obama to attack him for wanting to "shred the employer-based health-care system." McCain's health policy plan included repealing the special tax carveout for companies providing health insurance subsidies to their workers. This didn't please all employers, as the New York Times reported at the time (in a piece with the factually groundless and simply obnoxious lead "American business, typically a reliable Republican cheerleader...."). I argued at the time that big employers didn't like losing an advantage they have that keeps you from seeking another job or demanding a raise.
Today, Susan Ferrechio reports that a coalition of congressman and small business groups are worried about the effects on small business of a current reform proposal that all (or most) employers offer health insurance.
[I]f the government begins to mandate insurance for small businesses, it would eliminate 1.6 million jobs, according to the National Federation of Independent Businesses, which lobbies on behalf of small business. “To simply pass a law that would force employers to do something they just can’t afford is destructive in any economic environment, but in these incredibly trying times, it’s absolutely lethal,” said NFIB President Dan Danner.
It's another example of why big business often likes or doesn't mind more regulation: Regulation adds to overhead, which disproportionately hurts the small guys and doesn't affect as much those with better economies of scale. We've seen this recently in tobacco, toys, and food, among other industries.
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