John Torinus has it wrong in his recent assessment of Healthy Wisconsin, and business readers are left with a misleading analysis that could send them down a more costly path.
Torinus said, "…high payroll taxes paid by employers inevitably put a damper on wage increases." Of course he’s right, but very incomplete. He ignores vital, offsetting factors that good business leaders would surely include, an accuracy he would expect from his own managers.
First, the 10.5-percent employer tax (for Healthy Wisconsin) replaces the 15 percent most employers are currently paying for employee insurance premiums, thus wages are more negatively affected today than after the 4.5 percent of wage savings in HW is applied.
Since when does a 10.5-percent cost have impact but a 15-percent cost doesn’t? Most business leaders would swap the higher for the lower any day, but obviously not John Torinus.
Secondly, he points to the 4-percent employee tax and doesn’t mention that it offsets part of what they are already paying – and additionally, it includes coverage of limited vision, dental for children, mental parity and pharmaceuticals employees are not currently getting paid for. A 16-percentincrease in coverage, and there’s no additional cost for a family plan!
Torinus scoffs that David Riemer ignores the "consumerism" in his earlier plan, which included health savings accounts. But there’s a rather simple reason: according to the Bell Policy Center, "HSAs coupled with high-deductible health plans increase cost-consciousness among enrollees, but have little effect on overall health care costs."
That’s obviously not what Torinus wants to hear, because he uses HSAs in his own company. Health costs will indeed decrease for his company but they will increase for employees. That’s the pay cut he argues against! When employees realize that, will they then demand higher wages to compensate for lower benefits?
Healthy Wisconsin makes a systemic change that Torinus apparently doesn’t like, nor does the debater he cites – Rep. Leah Vukmir (R-Wauwatosa) – and the other Republicans who share in the $600,000 of campaign contributions they’ve received from the insurance industry. When an industry gives this kind of money, you just know they are on the losing side of the argument. But money talks.
HW eliminates the 31 percent of wasted middleman costs that are consumed by the current insurance bureaucracy. For the same dollars we are spending today to cover 90 percent of Wisconsinites, we can provide greater coverage to 100 percent instead, so it’s hard to understand why Torinus doesn’t see the forest through the trees.
These systemic changes eliminate the costs that add nothing to health care, like insurance broker commissions, actuarial costs, costs for cherry-picking and gatekeeping, high executive salaries and the ever-rising shareholder profits. Even the insurer’s high costs for lobbying and campaign contributions (to Vukmir and others) that are passed on to the patient are eliminated under Healthy Wisconsin.
It would be a disservice to the business community to not include all of these tradeoffs, and corporate leaders should quit listening to both sides and do their own math. Simply multiply current payroll by 10.5 percent and compare the result with what is now being paid for employee health care and its associated administration costs. Now you have your answer.
Torinus deserves great credit for being ahead of the curve on health care, but in this writers’ view, he’s not far enough ahead. While he has reduced his costs, he could reduce them more because at least some of his employees are still stuck with the 31-percent burden. Torinus owes it to the business community to get all the facts on the table. Readers may not agree with mine or his facts, but they are experienced business leaders and can sort them out for themselves.
Healthy Wisconsin is not perfect, as David Kliber pointed out in his Milwaukee Biz Blog entry. But we should fix it, not trash it, and the Republicans should take that responsibility. We need a small business transitional tax break, and we should have the health board selected by the new, independent ethics board rather than the governor.
Winston Churchill once said, "Americans will always do the right thing, but only after failing at everything else." Let’s prove him wrong.
Jack Lohman is a retired business owner from Colgate and is a founding member of www.BusinessCoalition.net. He is the author of "Politicians – Owned and Operated by Corporate America" and can be reached at jlohman@execpc.com.
