The Great Healthcare Bamboozle
As teenagers we tried to master the art of walking the fine line that exists (so we think) between telling a lie and not telling what we know to be the truth. But then, presumably, as we age and mature we leave behind such sophomoric verbal gymnastics and stick with telling the truth or keeping our big mouths shut.
Sadly, the one population outside of teenagers that seems to have mastered then never left behind this oh-so-delicate art of only 'sorta' fibbing, is politicians. And one of the most grandiose, glaring, and unmistakable instances of "it's-true-only-until-its-not-true" lies ever told was when, in the attempt sell his healthcare overhaul plan, our president told us "if you like your current healthcare plan, you'll be able to keep it." This whopper is simultaneously as true as it is false.
To fully explain this apparent dichotomy some background information is required:
In his years prior to running for federal office Barack Obama made clear his ultimate desire to see the United States healthcare system set up and run as a "single-payer" system. That single-payer being the federal government. Such a system would, by necessity, eliminate private-payer insurance plans and companies; if the government is the only payer they wouldn't be necessary. There's no doubt this is a Marxist-utopian view wherein a governmental structure is the ultimate power and decision maker. Everything funnels into and through a centralized governmental entity that has control over most or all decision making. To some minds this is an ideal arrangement. Our nation is clearly being managed by one such mind.
The Patient Protection and Affordable Healthcare Act, frequently referred to as "ObamaCare," establishes a federally administered government insurance option so that those lacking a private insurance provider may enroll in the federal plan and have access to 'affordable' healthcare. (Of course the rub is, for those lacking a private insurance provider there is no "may enroll"; they "must" enroll.) Having health insurance is soon to be the law of the land, enforceable by that oh-so-competent and compassionate federal bureaucracy, the Internal Revenue Service.
Here's where things get sticky.
The mission of a publicly traded corporation is "the maximization of shareholder wealth." That is what drives corporations. It's why senior corporate executives are compensated with million-dollar-plus salaries. Unfortunately, we now find ourselves living in a nation where "wealth" has been turned into a four-letter word. Still, the fact is that corporate management's primary responsibility is to maximize the wealth of the corporation's owners. For a publicly traded company, that means its stockholders.
This is a primary piston of the free enterprise engine. As President, (CEO) Chief Executive Officer, (CIO) Chief Information Officer, etc., my job is to see to it that our owners -- the individuals who invest in us and provide the company with capital by purchasing our stock -- are receiving the greatest possible return on their investment.
Suppose that I run Xerox Corporation. Now suppose that for every dollar an investor places into Xerox he or she receives a return of $0.17. If, for every dollar that investor places into Goodyear, he or she receives $0.21, the investor's money will begin to leave my company and go to Goodyear. If John Deere returns $0.25 per dollar invested, investors will migrate to John Deere. It's the free enterprise and open market system. Maximizing the wealth of my owners/shareholders is why I go to work every morning. If I cannot succeed, the corporation's Board of Directors will fire me and find someone who can.
The overwhelming majority of Americans who have health insurance have it through a plan administered by their employer as part of an overall benefits package. One of the ways employers make themselves attractive to quality employees is via a benefits package that includes health insurance. If your doctor's visit costs $110, you only have a co-pay amount of $20, and the other $90 is covered by someone else. It's a nice setup. The company negotiates the package which is administered by an insurance or HMO provider: Aetna, Kaiser Permanente, Blue Cross/Blue Shield, Afflac, and so forth.
That healthcare plan through Blue Cross is costing the employer something. Say it's costing the employer $2 million a year to provide this healthcare insurance plan, this "benefit" of being an employee of Widget Company. As CEO of Widget Co., the presence of this new government option now provides me with a new set of options. Remember, my number one mission is to maximize the income of my shareholders, which in turn encourages more investment in my company, which means more money in our bank account, more ability to acquire competitors or complementors, more ability to hire, to update plant and equipment, etc. If I eliminate our healthcare plan, that's $2 million per year that goes back to our bottom line, which makes way for $2 million I can return to my owners, invest, or use to retire debt. I can eliminate the benefit, kick my employees off the plan -- because they can now just enroll in the federal plan -- and save my company and my owner/investors two million dollars.
As the President/CEO of a corporation, why would I ever not do that? Why would I not eliminate our in-house healthcare program, allow all my employees to migrate over to the federal plan and save $2 million?
Answer? I wouldn't not do it. That's exactly what I'd do and return that $2 million to the bottom line. This is a business. I have a responsibility, an obligation to my owners. I'm sorry, employees, but the federal option is the safety net that's there for you -- use it.
And now, as the individual mandate and federal exchanges date draws nearer, this is exactly what we see happening. It's in the headlines daily. In the past three weeks alone a slew of corporations -- nationwide employers -- al, have made this very decision. Time Warner Corp., IBM, Home Depot, and Trader Joe's are among the larger, more visible ones. So obvious is the fact of this inevitable corporate shift that even the once hardline pro-Obamacare unions like the AFL-CIO are reading the tea leaves and realizing the ultimate effect this horrible piece of rushed-through legislation is bound to have on families -- on the very labor they rely upon to pay the dues which fund their swollen salaries.
Many, including myself, have a difficult time believing that a man with degrees from Columbia and Harvard (or so we've been told), would not, could not, and did not foresee this inevitable eventuality.
That brings us back full circle to telling the truth, just not all of it. "You'll be able to keep your private [employer] insurance plan if you like it" was indeed a statement of truth. It just also happens to be true that there likely won't be an employer option to keep. If companies are free-market driven entities that tend toward efficiency, the elimination of waste, and inherently find ways to maximize (not minimize) return on investment --and they are -- it's only natural that they'll recognize this particular wasteful practice and take steps to eliminate it.
I tried this a zillion times when I was seventeen. The telling of a tale that was, well, mostly true. Never got away with it. This was a masterstroke of gamesmanship. The president has used the very system he despises (free market capitalism) as the instrument for implementing a plan that could have come into existence no other way. In coming years, when in their quest to be efficient managers of the investing public's money, Goodyear, JC Penny, Maytag, et. al., start eliminating healthcare plans, saving their investors millions, kicking employees (aka: U.S. citizens) onto the government plan, and driving the USA toward the president's long-ago stated goal of a single-payer healthcare system, they will be unwitting participants in a plan so masterful, he didn't even have to lie (directly) to get it done.