More Congressional incompetence

Once again, Congress shows that it does not understand the consequences of it's actions.  They passed this big healthcare overhaul without really thinking through how businesses and people would react to it.

If you raise the taxes on milk then people buy less milk.  But if you raise the taxes on alcohol then people buy less milk.

People rarely respond to rules, like taxes or healthcare mandates, the way they are intended to.  If you pass a tax on alcohol then you are probably expecting people to buy less alcohol.  When Congress passed their healthcare mandates they expected companies to just suck it up and pay for the additional coverage.  But the Department of Health and Human Services has realized that many employers will simply drop their healthcare coverage entirely and leave their employees worse off.  So the DHHS is now handing out exemptions to the healthcare mandate.

Soon every company in America will apply for a waiver.  Those that don't get it will drop their employee healthcare coverage.  Those employees will be forced to buy their coverage from the government.

So the mandate will end up having no effect except to leave many workers worse off, and to improve the profits of companies that don't get the waivers.  This is stupid.  Even if you think that Congress's goal was to socialize healthcare then you must agree that the whole DHHS waiver maneuver seriously undermines it.

You have to design laws with people's responses in mind.  When we do this, how will people react?  What could people do to subvert this rule?  What will the long-term effects be?

If you really want every employee in America to be insured then a mandate is the wrong way to do it.  That's a stick.  You need a carrot, or at least a carrot and stick approach.  How about a graduated scale of payroll taxes?  Uninsured employees cost X% more in payroll taxes than insured employees.  I'm sure there are many similar approaches that would make companies choose to provide appropriate minimum levels of insurance.

I don't really know who Urban Institute is, but they wrote a great article describing what they call 'Evidence-Based Policy'.  This is the sort of planning and thinking that I believe needs to happen before a law is written.

But those implementation issues are not the real problem.  Adding health insurance increases the cost of each employee.  If push comes to shove, many companies will choose to lay off workers rather than absorb the extra cost of providing additional insurance.  There isn't a carrot that you can attach to that.  It's simple math.  So your healthcare mandate (or whatever other rule you implement to replace it) will decrease overall employment.  And it will do it at the bottom end of the employment scale--low earning part-time jobs go first.

This is why the Democrats are going to lose big in this coming election.  They chose to decrease overall employment during a recession.