Reuters Clueless on Business Health Care Opposition
Reuters Donna Smith filed a June 28th story on health care, reporting:
Soaring healthcare costs undermine the competitiveness of U.S. businesses, strain state and federal budgets and drive many Americans into bankruptcy.
The U.S. Chamber of Commerce, which represents 3 million businesses, has started a grass-roots campaign opposing major elements of Obama’s plan with thousands of business owners writing lawmakers to say they are against it.
So if health care costs are undermining “the competitiveness of U.S. businesses” then why is the U.S. Chamber of Commerce waging a grassroots campaign against it? Smith never tells us. Perhaps that is because, contrary to what Smith asserts, health care costs are unrelated to American competitiveness. The Wall Street Journal explains:
Employers may write the checks to the insurance companies, but workers still pay for the coverage they get from those employers. The total cost of an employee is what matters to businesses, and fringe benefits are as much a part of compensation as cash wages. When health costs rise, firms don’t become less competitive, as if insurance were lopped out of profits. Instead, nonhealth compensation drops. Or wages rise more slowly than they otherwise would.
Smith does report that Senate Finance Chairman Max Baucus (D-MT) has brought the cost of his bill down to $1 trillion from $1.6 trillion. But Smith fails to report on how he did this. If it was accomplished by a stricter employer mandate (forcing firms to pay a fine for not providing health insurance to their employees), then he has essentially levied a $600 billion tax increase on U.S. businesses. Now that would harm American competitiveness.