National Healthcare Update

This piece originally appeared as an article in the Fractured Atlas newsletter on April 15, 2006.

The American healthcare system is a spectacular mess, and artists are disproportionately underserved by our current employer-based model. Meanwhile in Washington, Congress is facing a handful of proposals that would radically alter the market for health insurance, especially with respect to self-employed individuals like artists. Here are a few of the bills that Fractured Atlas is watching closely:

The Small Business Health Fairness Act of 2005
(H.R. 525 / S. 406)
This bill would expand the Employee Retirement Income Security Act (ERISA) to allow for federally regulated Association Health Plans to cover small businesses and self-employed professionals on a national basis. Allowing associations like Fractured Atlas to offer ERISA-qualified plans should result in a dramatic increase in the accessibility and affordability of health insurance for our nation’s artists.

Benefits: Greater flexibility for associations to provide coverage on a national basis
Dangers: Weakens consumer protections; some risk that self-employed artists may not be eligible to join ERISA-qualified association health plans
Bottom line: Fractured Atlas supports passage of this bill

The Healthcare Choice Act of 2005
(H.R. 2355 / S. 1015)
This bill would allow health insurance companies to market individual policies approved for sale by any state to consumers in all other states. Passage would undoubtedly flood the market for individual health insurance, increasing consumer choice and presumably lowering costs. Unfortunately, this bill goes too far in dismantling the consumer protections provided by state insurance departments. Unlike the Small Business Health Fairness Act of 2005, which relies on ERISA rules to protect consumers from predatory or dishonest practices, this bill would allow the market for individual health insurance to be governed by whichever state has the most aggressively pro-business policies, whether or not it provides adequate consumer protections.

Benefits: Vastly increased options, especially for healthy people, on the individual market
Dangers: Terribly weakens consumer protections; would make it almost impossible for sick or elderly to buy health insurance on the individual market
Bottom line: Fractured Atlas opposes passage of this bill

“The Walmart Bill”
(Various state legislatures)
Earlier this year, Maryland’s state legislature passed a law requiring all businesses with over 10,000 employees to spend 8 percent of payroll on healthcare. Since Walmart was the only company in the state large enough to be affected, this has been informally dubbed the “Walmart Bill.” More than thirty other states are currently considering similar legislation. While superficially attractive, this is a terrifically misguided approach. It further entrenches a broken system (i.e. employer-sponsored healthcare) and imposes what amounts to a huge tax on American businesses that is not levied on foreign competitors. It also does nothing to help the nation’s growing self-employed workforce, including artists.

Benefits: You get to say you stuck it to Walmart???
Dangers: Entrenches broken system, does nothing to help self-employed
Bottom line: Fractured Atlas opposes passage of these bills

You may notice the conspicuous lack of a proposal for single-payer universal coverage. I wish I could report that such a proposal was getting serious attention in Washington. Unfortunately, that hasn’t happened yet, despite the fact that nearly every serious economist (including more than one adamant free-market enthusiast) who has looked at the issue has come to the same conclusion: that a federally managed single-payer model is the only workable solution. Until the folks on Capitol Hill figure this out, we’ll have to muddle through as best we can with stop gap solutions like these.