Government health care, as proposed by Senate Democrats and approved in their version of the state budget, is fraught with exorbitant costs, high risks and political problems.
An informational hearing on July 11 of the state Senate Health Committee that I serve on featuring testimony from two experts offered me little, if any reassurance, in part because the experts were not completely aware of all the details in the government health care plan.
One of the speakers at the hearing was Stanford University economics professor Alain Enthoven, considered an expert in health care. During his presentation, Enthoven testified that the current health care market needs rules and management. During my questioning of Enthoven, I noted that the Senate Democrats’ plan would be administered in a political environment. As a result, it is inevitable that a government health care system will have political rules and management, and that is troubling.
A glaring example is the fact that a single group is treated differently by the Senate Democrats’ proposal. School districts with some of the best benefits in the state are in the plan; however, they are guaranteed that their benefits will not change to conform to the government plan that the rest of us will be forced into. In essence they are out of the plan.
Another disturbing element is the effect the plan would have on many excellent Wisconsin institutions like the Dean Health System, Marshfield system and many others that are performing outstanding work through research and innovation. Political rules and management that would dominate government health care have the harmful potential of stifling the progress of these tremendous medical facilities. The state should not be an obstacle to creativity in the private sector.
The U.S. General Accounting Office (GAO) on Aug. 23, 2004, released a report on health care costs in Milwaukee. Wisconsin Congressman Paul Ryan and Milwaukee Mayor Tom Barrett requested the report. The findings showed that health care costs in Milwaukee are higher than in other parts of the country. Local employers reacted by working in conjunction to form mini-groups with purchasing power. This type of private sector innovation would disappear under a government plan that eliminates private insurers and institutes political rules and management.
Professor Enthoven had to admit during my questioning that he was not aware of all of the political components of the Senate Democrats’ plan and even called the potential of political rules and political management a "serious problem in our democracy."
The other invited speaker was former state Senator and former Department of Health and Family Services Secretary Joe Leean. Leean insisted teachers are included in the government plan and are treated the same as everyone. They are not.
The Legislative Fiscal Bureau wrote a memo I requested about teachers and the universal health care plan:
"Municipal Employment Relations Law. Provide that the definition of economic issue would include ‘health insurance coverage of benefits not provided under the Healthy Wisconsin Plan.
"Under current law, the definition includes the term ‘health insurance.’ Further, provide that, for the purpose of determining if a school district employer has maintained current fringe benefits requirements under current qualified economic offer (QEO) law, the Wisconsin Employment Relations Commission (WERC) would be required to consider the employer to have maintained its health care coverage benefit if the employer provides health care coverage to its school district professional employees through the Healthy Wisconsin Plan and supplements that coverage, if necessary, to produce a health care coverage benefit that is actuarially equivalent to the health care coverage benefit in place before the school district professional employees become covered under the Healthy Wisconsin Plan."
In other words, teachers are guaranteed to retain their current coverage. The rest of us will take the plan dictated by the government health authority.
During the July 11, 2007, Health Committee hearing, I was more than a bit surprised that two invited speakers were brought in to testify in support of government health care and lecture the committee about the plan while they both were unaware of some of the more critical and troubling elements contained in the proposal.
Finally, this is the worst possible time to even be thinking about increasing taxes in Wisconsin. There are numerous Wisconsin leading indicators crying out that a government one-size-fits all health care program is folly.
- The Wisconsin Taxpayers Alliance (WTA) has done some projections on the cost of the Senate Democrats’ plan, Healthy Wisconsin (HW), if the plan were to begin in 2007. The WTA reports:
"Based on 4.6 percent annual wage growth projected by the Wisconsin Department of Revenue, HW revenues would increase from $15.2 billion in 2007 to $23.9 billion in 2017. If (the consulting group that worked on the government health plan), the Lewin Group is correct and health costs grow 6.5 percent per year, plan expenses would reach $28.4 billion by 2017. If costs grew eight percent, similar to recent increases in the existing state employee plan, spending would reach $32.8 billion.
"Since the result would be deficits of between $4.5 billion and $8.9 billion, if the state HW (government) plan were to remain solvent, total payroll tax rates now set at 14.5 percent would have to rise to between 17.3 percent and 19.9 percent over the next decade.” - The WTA study, "Wisconsin’s Eroding Household Income," reports on Wisconsin income trends based on figures from the U.S. Census Bureau. From 1999 to 2005, Wisconsin’s median household income fell 2.2% from $45,667 to $44,650, while the national median rose 13.8% from $40,696 to $46,326. Wisconsin ranked 50th in the nation in household income growth during the period. This is no time for Wisconsin to enact the largest tax increase in the history of the United States.
- Wisconsin is undergoing a foreclosure crisis.
- American businesses like Sears and Home Depot are experiencing lower profits due to a housing slump.
- China’s trade surplus has rocketed to new heights.
There may never be a good time for government health care in Wisconsin. However, now is clearly not the time for the Senate Democrats’ plan fraught with politics controlling health care, and Wisconsin current economic indicators ranking Wisconsin as one of the highest taxed states, with the lowest income growth, and a forecast of less jobs and less income due to the largest housing slump in 16 years.
State Sen. Mary Lazich (R-New Berlin) represents the 28th Senate District.
