- The Washington Times - Friday, July 31, 2009

ANALYSIS/OPINION:

When it comes to their constituents’ health care, the Blue Dogs are barking up the wrong tree.

House Blue Dogs — moderate Democrats who represent Republican-leaning districts — joined ranks with liberal Democrats on Wednesday to impose a government insurance system on all Americans.

The leader of the pack, Rep. Mike Ross, Arkansas Democrat, confusedly assured that government insurance “will not be mandated on anyone,” but that “everyone in America will be required to have health insurance.” He claimed that his negotiations cut the cost of the House health care bill by 9 percent and made it possible for more small businesses to be exempt from providing health care to their employees.

On its face, it’s true that it is possible to require insurance without mandating that it be government insurance. The problem is that government insurance will be so heavily subsidized that most will choose it over private insurance because it will be much cheaper.

In the original House proposal, small businesses with a payroll of less than $250,000 were exempt from any penalty for not providing health insurance. The new proposal raises that exemption to $500,000. If a small business with a payroll of less than $500,000 is currently providing private health insurance, it will make no financial sense to continue.

The average total cost of private insurance for a family of four in 2009 is about $13,500, which is split between the employee and employer. Under the new House exemption, an employee with a family of four making 400 percent of the poverty level ($88,200) will pay $9,702 for government insurance. If the employee is making 300 percent of the poverty level ($66,150), the total payment will be $5,953. That’s only 44 percent of the cost of private insurance.

Excluding firms with payrolls of up to $500,000 will dramatically increase the cost of the government health care program because more people will use it. This will require higher taxes to finance the system. The Blue Dogs’ claimed cost savings are illusory.

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