Cannon’s Second Rule of Economic Literacy
…appears at the end of this a poor, unsuccessful letter I sent to the editor of the Washington Post:
After quoting a scholar who expresses the economic consensus that the rising cost of employer-purchased health benefits “means lower wages and salaries,” “New study shows health insurance premium spikes in every state” [Nov. 17] immediately contradicts that consensus by stating, “employers are attempting to shift health costs onto their workers” by “asking employees to shoulder a larger share of the premium.”
If workers bear the cost of employer-paid health benefits in the form of lower wages and salaries, then increasing the employee-paid portion of the premium is not a cost-shift. Workers would have borne those costs either way.
Employers cannot shift to workers a cost that workers already bear.
Schism in the Church of Universal Coverage
On the Diane Rehm Show last week, I predicted that all the lovey-dovey coalition-forming by the Church of Universal Coverage would fall apart as soon as people started talking about actual reforms instead of vague principles.
Today, The New York Times reports:
Two labor unions have pulled out of a broad coalition seeking agreement on major changes in the health care system.
The action, by the American Federation of State, County and Municipal Employees and the Service Employees International Union, shows the seeds of discord behind the optimistic talk at a White House conference on health care this week.
It also illustrates the difficulty of reaching agreement on two of the knottiest issues in the health care debate: whether to offer a new government-sponsored insurance option, and whether to require employers to help pay for employee health benefits.
I made a similar prediction in this op-ed, where I urged that a new government-sponsored insurance option and mandates are two of three proposals that must be blocked at all costs. The third: price controls.
Cato on Facebook
Cato on Twitter
Cato on Google+
Cato on YouTube
