Promote the General Welfare

The preamble to the United States Constitution says:

We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.

I call attention to the reference to promoting the general welfare of the people and their posterity. There are few things more central to the general welfare of our citizens than access to adequate health care. At some point we have to deal with the fact that over 45 million people in our country, including a large number of working adults, do not have such access because they have no health insurance. The uninsured rates vary from a staggering 25.1% in Texas to 8.5% in Minnesota.

The State of Massachusetts has stepped into the breach by passing a law that requires every resident in the state to have some form of health insurance. The plan, which uses a mix of financial incentives and penalties to induce compliance, would provide free or heavily subsidized insurance to poor people who heretofore could not afford any form of coverage. Those who can afford insurance but fail to get it will suffer meaningful tax penalties. Those who have existing coverage will, perhaps surprisingly, see their insurance premiums go down, which highlights the cost in the existing system related to medical services provided to uninsured patients.

The bill does not require a tax increase, but will require any business that does not offer health insurance to its employees to pay the state a fee of $295 per employee per year. Remaining costs will be paid out of cuts in other state spending and existing federal reimbursements that are intended to be an incentive for states to reduce the number of uninsured, of which there are 500,000 in Massachusetts.

The initial reaction in certain quarters might be to dismiss Massachusetts as a bastion of liberal idealism but that would be a mistake. This law was overwhelmingly approved in the Massachusetts legislature with broad bipartisan support and will almost certainly be signed into law by a very conservative Republican governor, Mitt Romney. Only two members of the state legislature voted against the measure. The employer mandate appeals to liberals and the focus on individual responsibility appeals to conservatives.

Many other states are stepping into the federal void. Last year 19 state legislatures debated some form of insurance reform, up from 12 the year before. Some are focusing on requiring large employers to provide and pay for insurance; others are focusing on helping small employers offer insurance they’ve previously been unable to offer; others are attempting to first ensure coverage for children; while others are debating ways to provide universal health insurance for all residents. This surge of state-by-state responses, under which Americans could be treated in dramatically different ways depending on where they live, will put increased pressure on Washington, DC to come up with a federal solution that applies equally to everyone in the country. It’s time for such a solution. Polls have shown that Americans want a universal solution and are willing to pay for one. Of course, how much to pay and through what means are issues yet to be resolved and there is a wide range of opinions on those questions.

Businesses are becoming a catalyst in the debate because more and more of them are cutting or eliminating health care coverage for employees as a cost-cutting measure. That trend is increasing the pressure for government imposed solutions that are likely to be paid for in large part by – you guessed it – businesses. Because this issue is so central to the well being of every person and family, it’s not going to go away, particularly as medical costs continue to rise at alarming rates. Therefore, it behooves business leaders to come to the table and become part of the solution. They should pay attention to the warning from the Fram oil filter guy: “You can pay me now, or you can pay me later.” Government is going to do something, and relatively soon. Business leaders shouldn’t wait too long, lest the issue gets resolved without their involvement.