Republican governors across the United States, including Gov. Scott Walker, have decided not to implement a state health insurance exchange. Two of their common arguments for not implementing a state health insurance exchange are that it denies individual states the right to adequately regulate their own health insurance exchanges and that states don’t have enough resources to fund the exchanges in a manner the federal government requires. In addition, Papa John’s CEO John Schnatter and The National Restaurant Association have complained Obamacare will force businesses, especially small businesses, to raise their prices or cut jobs and employee hours.
I find it ironic these political figures, businesses and industry associations, all known for their adherence to free-market principles like rational economic self-interest, are unable to recognize their own economic self-interest. If political figures like Walker and businesses such as Papa John’s had followed their own rational economic self-interest to lower their individual state’s or business’s health care costs, they would have advocated for a single-payer health care system and as a result would not have to worry about any health care costs.
Anyone who has followed Walker’s tenure as Wisconsin’s governor, even periodically, will see that he has opposed Obamacare from the start. When the U.S. Supreme Court upheld the constitutionality of Obamacare’s individual mandate, holding that the mandate was a tax, Walker declared in an op-ed in the Washington Post that “Obamacare will devastate Wisconsin” and that “[i]t punishes … employers and employees of small businesses.” This is similar to the reasoning by Maine Gov. Paul LePage for not implementing a state health insurance exchange in Maine. He told The Huffington Post that “a state exchange puts the burden onto the states and the expense onto our taxpayers.” Not only have free-market politicians complained about not having enough state funding to implement their own state health insurance exchanges, but also businesses and industry groups have complained that Obamacare will force them to raise prices and cut jobs or employee work hours. In all honesty though, I have no sympathy for Papa John’s CEO John Schnatter or The National Restaurant Association regarding their complaints about higher costs caused by Obamacare.
It is true employee health care insurance is a big cost and expenditure that many businesses undertake. For example, Think Progress reports employee health care costs “add $1,525 to the price of every car that leaves the lot” of General Motors, illustrating GM spends more on employee health care than it does on steel to make its motor vehicles. To be competitive here in the United States and internationally, we need to lower health insurance costs on employers.
A single-payer health care system, also known as Medicare-for-all, would remove the burden of health care costs from businesses and individual states and shift those costs onto the federal government. It would also be more efficient than our current fragmented health care system. According to Physicians for a National Health Program, the U.S. health care system spends 31 percent of its total expenditures on administrative and overhead costs, compared with Canada’s rate of only 16.7 percent. A Medicare-for-all system would greatly reduce these administrative and overhead costs and allow the federal government to cover every American citizen at a lower cost, as is illustrated by the fact that the U.S. spends the most per capita on health care in the world, but unlike most industrialized democracies, does not provide universal coverage.
As the Government Accountability Office said in 1991, “If the U.S. were to shift to a system of universal coverage and a single payer, as in Canada, the savings in administrative costs would be more than enough to offset the expense of universal coverage.” I have not heard Schnatter or The National Restaurant Association openly advocate for a Medicare-for-all system, a system that would relieve them completely of their “burden” to contribute to their employees’ health care plans. I have also not heard Walker advocate for a universal health care system, instead hearing only vague references to private health care and consumer choice. Instead, groups like National Federation of Independent Business have opposed it in the U.S., as Ellen Valentino, Delaware State Director for the NFIB said, “Single payer systems are breaking budgets all over the world and it makes very little sense to pursue it in Delaware.”
It is time for free market politicians like Walker and businesses like Papa John’s to stop complaining about the costs incurred on them by Obamacare. If Walker and Papa John’s had simply followed their rational economic self-interest and advocated for a single-payer health care system, and if it would have been implemented, they would not be paying for people’s health insurance and would have nothing to complain about. They only have themselves to blame.
Aaron Loudenslager ([email protected]) is a first year law student.