The anti-union folks came up with the execrable amendments 47 & 49. (Spoiled trust-fund baby Jonathan Coors may have instigated this but the business community sure jumped on board quickly – and as such deserves equal opprobrium.)
So the pro-union folks came up with their counterstrike of 53, 55, & the Health Insurance Initiative (not numbered yet). And yes, the union backed proposals are as deadly to business as the business backed proposals are to the unions.
And all of the proposals are anti-worker as they will reduce the pay of workers (the business backed measures) or reduce the number of jobs in Colorado (the union backed measures).
This post is to discuss the stupidity of the Health Insurance Initiative.
An amendment to the Colorado Constitution concerning health care coverage for employees, and, in connection therewith, requiring employers that regularly employ twenty or more employees to provide major medical health care coverage to their employees; excluding the state and its political subdivisions from the definition of “employer”; allowing an employer to provide such health care coverage either directly through a carrier, company, or organization or acting as a self-insurer, or indirectly by paying premiums to a health insurance authority to be created pursuant to this measure that will contract with health insurance carriers, companies, and organizations to provide coverage to employees; providing that employees shall not be required to pay more than twenty percent of the premium for such coverage for themselves and more than thirty percent of such coverage for the employees’ dependents; financing the costs of administering the health insurance authority and health care coverage provided through the authority with premiums paid by employers to the authority and, if necessary, such revenue sources other than the state general fund as determined by the general assembly; directing the general assembly to enact such laws as are necessary to implement the measure; and setting the effective date of the measure to be no later than November 1, 2009.
Lets put aside the question of should people even get their health insurance from their employer – that’s how it works today for many. Lets just look at what this does.
First you have companies that do provide health insurance, but not at the mandated 80%/70% amounts. So let’s take a real example of a company that pays 100% of the individual and 0% of the family part. And it is set up this way based on employee feedback because many employees are single and many others have a spouse’s plan covering the spouse & kids. This change can be made at no cost to the company, but the employees will be worse off.
Lets take a second real example where a company provides health insurance at a bit below these percentages. But it’s a really good plan, covering most everything, and is through Aetna so that claims are paid with a minimum of hassle. Again, at no additional cost to the company they can get a plan that covers less through a carrier that is a PITA to deal with, but meets the percentages. Again, the workers are less happy.
Now the above examples are the best case scenarios. The workers are a bit worse off, the business is a bit worse off, but no jobs were lost. Lets get in to the bad cases.
Next we have the case of a company that provides no health insurance or what they provide is so much less than this, that in either case they are looking at a much larger expense. What’s key here is that this expense is per employee. Not per dollar paid to employees. Not per dollar of income received. It’s a flat fee per employee.
So what this company must do is layoff every employee it can, while getting the remaining ones to work as long and as hard as possible. Better to layoff 1 person and pay 2 others for 20 hours/week of overtime each.
This measure will reduce jobs substantially in those industries that provide little or no health insurance. And those jobs are overwhelmingly lower paying jobs – this really hurts the blue collar worker.
But that’s not the worst case. Lets now look at the companies that require lots of unskilled or semi-skilled labor, have a very low profit margin, and can be located anywhere. Those companies are gone. You can’t bring in an added expense like this and still compete against companies that don’t have this additional overhead.
Granted, these are jobs that suck. They don’t pay well. Those workers having no health insurance is a national shame. But eliminating the job is not the answer because the job, lousy as it is, beats no job.
The Health Insurance Initiative will be devastating for the workers at the lower end of the economic scale in this state. And for most of them it doesn’t mean they will get health insurance, it means they will go from a job with little or no health insurance … to no job at all.