The Free-Lunch Debates

J. Mark Huffman

President

Media-Max

Annandale, Va.

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[After running the numbers of the proposed White House health-care plan, which capped small-business costs at 3.5% of payroll, Wicks concluded that she could afford to insure all her employees for only $30,000 more than the $30,000 she was already paying. She could raise that money, she said, by raising prices 1%.]

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Judy Wicks expressed her amazement at the great deal presented to her that would allow her to insure six times as many employees for only twice the cost. I too would jump at such a deal. However, someone must pay for all that additional insurance. It is here that the Clinton health-care plan falls apart. Direct costs may be only $60,000, but the indirect cost to both Wicks and future generations will be astronomical.

The government has never come close to accurately predicting the cost of its programs (for example, Medicare and Social Security) and will undoubtedly dump a colossal financial failure on us if health-care legislation is passed as contemplated. The government should address issues within its control, such as portability, universal access, and serious tort reform, and leave the business of health insurance to businesspeople.

Michael Kron

Legal/Administrative Supervisor

Assured Management

Anaheim, Calif.

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Wicks made the observation that the Clinton plan would cap the amount a small business must pay at 3.5% to 7.9% of payroll. Can she, or anyone else, cite an example of a current federal program that is more than two years old and that has not had massive increases over the original estimates and guidelines of the plan? If by some remote chance there is a federal health-care program implemented, you only have to look at Medicare to know what will happen.

Ask any senior who has been on Medicare for more than two years and find out if expenses have increased or benefits have been significantly reduced. Ask the millions of seniors who buy supplemental policies why they have them. They will all tell you the same thing: the federal government says it cannot afford to run the plan as originally intended.

Dwight Declet

Salesperson

Transamerica Financial Resources

Portland, Oreg.

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I have calculated the cost of the Clinton plan for our business, and we would see a small savings if we were to switch to it from our conventional policy. In addition, the Clinton benefits plan is far superior to the one offered by our company. So I should be a strong supporter of the Clinton plan, but in fact I'm a vocal opponent.

Any savings offered by the Clinton plan would be eliminated by the additional administrative and reporting expenses required. Also, further government intervention in the health-care industry would increase costs over the long term. The government is a very inefficient provider and manager of services like health care. I truly believe that within the next five years you would see an increase in the payroll tax from the 3.5%-to-7.9% range to more than 10%. The solution to the health-care crisis is to reduce the government's intrusion into the health-care industry. Individuals and businesses should be given more responsibility to make decisions on their health issues.

Craig S. Carrel

President

Team One Plastics

Albion, Mich.

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It was both amusing and frightening to read Judy Wicks's analysis of the Clinton administration's health-care proposal. Despite the Congressional Budget Office's repudiation of the economics of the Clinton plan, the administration continues its campaign to offer something for nothing to various groups.

Wicks imagines "a bargain" when told that by creating a large mandatory bureaucracy she'll get more than three times the health care at the same price. If a new supplier of vegetables promised Wicks three times the product for the current price, would she imagine "a bargain," or would she be suspicious about quality and delivery?

[Wicks said her company would also save money on paperwork because all medical benefits, including those under workers' compensation and auto insurance, would be transferred to the new universal health-insurance plan. Moreover, she pointed out that the proposal prohibits insurance companies from refusing or dropping coverage because of an employee's poor health.]

Wicks imagines that the formation of the Clintons' mandatory health-care-purchasing cooperatives will bring relief from the burden of paperwork and collecting employee contributions. However, the legislation offered by the administration places the burden of presentation and registration for benefits plans on the employer.

All Americans share the burden of health care -- as citizens, employers, employees, taxpayers, family members, and ultimately, patients. Reforms are needed in the health-care-purchasing system to provide access to quality care at optimal cost, without stifling innovation. The Clinton health-care plan would be a wonderful growth opportunity for bureaucrats, lawyers, and government workers but would divert precious resources toward administration and away from health-care providers.