The Wisconsin Universal Coverage Plan
Democrats who run the Wisconsin Senate have dropped the Washington pretense of incremental health-care reform and moved directly to passing a plan to insure every resident under the age of 65 in the state. And, wow, is “free” health care expensive. The plan would cost an estimated $15.2 billion, or $3 billion more than the state currently collects in all income, sales and corporate income taxes. It represents an average of $510 a month in higher taxes for every Wisconsin worker.Pro-rating the total dollars spent by population (5.5 million in Wisconsin, versus about 1 million in Rhode Island), the cost of a similar plan for Rhode Island would carry an estimated price tag of about 2.7 billion dollars, or about 80% of existing general revenues.
Employees and businesses would pay for the plan by sharing the cost of a new 14.5% employment tax on wages. Wisconsin businesses would have to compete with out-of-state businesses and foreign rivals while shouldering a 29.8% combined federal-state payroll tax, nearly double the 15.3% payroll tax paid by non-Wisconsin firms for Social Security and Medicare combined.
Basically we’re talking about making state governments into giant health insurance companies and making all other state government functions into side-operations of the super-insurers.
Wisconsin officials realize that many people aren’t going to be satisfied with their state-controlled coverage (especially if it’s run with the same competence that states have applied to say, public pension funds), so they’re moving immediately to block alternatives…
The plan is also openly hostile to market incentives that contain costs. Private companies are making modest progress in sweating out health-care inflation by making patients more cost-conscious through increased copayments, health savings accounts, and incentives for wellness. The Wisconsin program moves in the opposite direction: It reduces out-of-pocket copayments, bars money-saving HSA plans, and increases the number of mandated medical services covered under the plan.Wisconsin officials are conceding that that their plan will force many people to pay high prices for coverage that doesn’t make sense for them and therefore are denying access to plans that would give people better ability to tailor coverage to their individual needs. It’s a perfect example of the standard excess of big-government: If you don’t have the imagination or skill or desire to build a better mousetrap, then make building new styles of mousetrap illegal!
So where will savings come from? Where they always do in any government plan: Rationing via price controls and, as costs rise, waiting periods and coverage restrictions.