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Tuesday, August 4, 2009

Unintended Consequences

I am constantly amazed at how so-called intelligent leaders can continually make knee-jerk reactionary decisions with little to NO consideration to the consequences. Now that the auto-scam program is displaying just how inept a government run program can be, it helps shed considerably light on the potential disasterous Government Health Care plans. There is not enough time to go point by point, but rest assured that every step in the poorly designed Health care bills will elicit incredibly bad unintended consequences.

Start with businesses and Health Insurance. Ask yourself what you would do if you were a business owner. Put yourself in the following position: presently you are the CEO of a company with 100 employees. Your company provides Health Insurance, Dental and a 401K plan. You also provide a medical expense account and the program is administered through a 125 plan. The costs to you for these benefits equal approx 37%or so of payroll. The health benefit portion represents 18% or so. The Health portion also takes up the largest amount of admin time in employee education, registration etc.. this would include the compliance issues with regards to COBRA. Because of COBRA it is very difficult to make decisions about lay-offs as an employee still has the modest parachute of COBRA. Are you with me so-far. Under the plan the Democratic leadership is so desperate to race through this CEO will be faced with the following NO-BRAINER business decision. If the company offers Health Insurance it will continue to cost them approx 18% of payroll along with time and many treachous compliance issues. Or the company can TOTALLY drop ALL Health Insurance coverage and pay an 8% payroll tax penalty. Also by doing this there is NO more COBRA issues to deal with so lay-offs become easier then ever. So you're the CEO what do you do, continue to pay 18% plus headaches or pay 8% with NO difficulties whatsoever? Save 10% of your payroll expenses by choosing the 8% penalty.

I can tell you this a vast majority of CEO's will choose the 10% savings. Why wouldn't they? So, the unintended consequence is YOU will NOT get to KEEP the PLAN you are HAPPY with! Sound familiar? The second unintended consequence is LOSS of JOBS. It will now be easier to rid your payroll of poor performers and vested high salaried employees (which can now be replaced by younger and cheaper alternatives)

For every action there is an equivalent and opposite reaction. This health plan will create numerous unintended consequences, not to mention out of control expenses, loss of qualified Physicians, less service providers, rationing of care, death of elderly and much, much more....