January 17, 2006

Health-care bill too short-sighted
Source: Seattle Post-Intelligencer

BILL VIRGIN

Prescription-drug advertisements today come accompanied by pages of disclaimers, warnings and side-effect notices that run longer than the ad itself.

Legislation often comes accompanied by little more than a budgetary notice and a summary. But if the proposed Fair Share Health Care Act had similar warnings and disclaimers, they might read like this:

"This bill is intended to publicly whack someone we don't like very much. As for accomplishing anything about the underlying problem, or worrying about loopholes in this legislation, or ways to get around it, or unintended consequences, eh, we'll deal with that later."

The Fair Share Health Care Act has already been introduced in the House (2517) and Senate (6356) of the Washington Legislature. The bills propose that companies with more than 5,000 employees pay at least 9 percent of their payroll costs for health care, or pay the difference between those costs and 9 percent to the state.

"Most working Washingtonians obtain health insurance coverage through their employment, and a substantial majority of very large employers responsibly offer health coverage to their employees in Washington state," the legislation says. "However, the failure of some very large employers to offer affordable health coverage to their employees in Washington state has created inappropriate competitive advantages for those employers, and greatly increased the likelihood that their employees will be uninsured or enroll in publicly funded health care programs."

Just take a wild guess what specific "very large employer" the legislation has in mind.

The obvious, and correct, answer is Wal-Mart. It's obvious because organized labor, which loathes Wal-Mart, has said so. The AFL-CIO has launched its Fair Share Health Care Campaign in 33 states, according to the federation's news release. The only company specifically mentioned is Wal-Mart. A legislator quoted in that release is state Rep. Eileen Cody, D-Seattle, who introduced House Bill 2517.

Supporters of Fair Share Health Care have been encouraged by news out of Maryland last week that legislators there overrode a gubernatorial veto of a similar bill. And who knows, it just might pass here, what with Democrat-controlled House and Senate and a Democratic governor, not to mention a well-known and eminently boo-and-hiss-able villain.

Furthermore, while the usual suspects of the business community can be expected to pronounce their opposition, they may do so purely out of distaste for the legislation rather than any interest in rallying to Wal-Mart's defense. Wal-Mart is little more beloved in the business community than it is in organized-labor circles, and if someone wants to smack that company around it's no great nevermind to the Boeings and Weyerhaeusers of the world.

But there is certainly more than enough in the legislation to dislike for many to set aside whatever distaste they may harbor for Wal-Mart. That starts with the legally and morally dubious notion that government has any business dictating how much companies should pay for anything, outside of taxes and fees for government services. Why not, at that rate, tell business what it must spend for other employee benefits, or for marketing, or research and development, on the theory that "it's good for you" -- or good for someone.

Beyond that is the odd and arbitrary threshold of 9 percent. Suppose a company can deliver a better package of benefits at less than 9 percent? Whoops, sorry, no incentive for you to do that.

There's also the prospect that while supporters are targeting Wal-Mart, they won't stop there. In a story in The Olympian newspaper, Cody said the 5,000-employee threshold is a starting point that could be lowered in future sessions.

But the biggest issue is whether the legislation will accomplish anything with Wal-Mart or the larger questions of the cost of health care and the number of people without health insurance. Maryland's law set a threshold of 10,000 employees and 8 percent of payroll costs. An Associated Press story on the Maryland vote quoted a University of Baltimore professor who said Wal-Mart could get around the law by creating a second company in that state and dividing employees between the two and thus coming in below 10,000. Outsourcing would seem to be another obvious way around it. As another unintended consequence, companies could simply cut wage and salary increases to boost the health care component of compensation above the threshold, whatever percentage it's been set at.

The unfortunate fact about the underlying issues of rising health care costs and employer benefits (or lack of same) is that the causes and potential solutions are complex and largely beyond the reach of legislative mandate. A health care industry that finally gets serious about streamlining its paperwork and billing would be a help. So would a population that is smarter about its eating and exercise habits. As would a stronger economy, which not only gives companies the financial resources to pay for improved benefits, but also creates a competitive market for labor in which employers offer those benefits to attract and keep employees.

But the desire to "do something" and do it now, combined with an opportunity to slap around a political opponent, makes it all too easy to revert to easily packaged measures like Fair Share Health Care, or even more unattractive approaches like single-payer that will add new problems and unintended consequences to the existing set.

But no doubt the Legislature can come up with quick fixes for those, too -- even without the motivation of a ready-made villain like Wal-Mart on whom it can pin the blame.

P-I reporter Bill Virgin can be reached at 206-448-8319 or billvirgin@seattlepi.com. His column appears Tuesdays and Thursdays.