I recently watched Senator Ted Cruz debate Bernie Sanders on the Future of the Affordable Care Act. Cruz was in top form, while Sanders was congenial but still deluded that we can all have free health care paid for with other peoples’ money. The audience was from all around the country and presumably stacked with invitees from both sides. The moderators would call on audience members to ask pointed questions to specific candidates.
I’ve written about one of the audiance participants for Town Hall in “Obamacare Is a Job-Killer: Here’s the Proof.” LaRonda Hunter is a hair salon entrepreneur form Forth Worth, Texas. She began buying Fantastic Sam’s family hair salon franchises about a dozen years ago. She now owns four salons but would like to open one or two more locations. Ms. Hunter explained her dilemma to Sanders. She employs something like 45 people and expansion would push her past the 49 worker threshold where Obamacare requires her to provide health coverage.
To his credit, Bernie Sanders did not back down and try to sugarcoat his response. He thinks an employer like Hunter has a moral obligation to buy each worker a health insurance policy, costing, say, $4,000. Of course doing so would wipe out her profits and ultimately put her out of business. That’s fine with Sanders; he considers not offering health coverage an unfair advantage that makes it harder for Ms. Hunter’s competitors to offer coverage. He was being honest, even though his response was naïve. Many of the women who work for Hunter are likely lower skilled/lower-paid workers, most of whom cannot afford to spend $4,000 on health coverage.
Health coverage through work is not merely a cost of doing business like Sanders’ thinks it should be. Health coverage is a non-cash portion of employee compensation. Absent Obamacare, Hunter would not care whether her workers would collectively trade $4,000 in health coverage for $4,000 in pre-tax wages. The problem is: her workers are not indifferent to whether she pays them less cash and buys them health insurance. They presumably would refuse to work for her. The large payroll processing firm ADP has noticed that about $45,000 per year is the threshold below which few workers take up employee health benefits.
The point Hunter should have made to Sanders is the decision to not have coverage is not her choice; it’s her workers’ collective choices. Because she wants to expand, Hunter would prefer her workers willingly enroll in coverage. But Hunter also knows if her workers refuse to (indirectly) pay for coverage by accepting lower take home pay, she would be stuck paying for it. Sanders fails to appreciate that while self-destructive benevolence may be common in Congress, it is less common in the real world where entrepreneurs have to meet payroll.
Another audience member who was a nursing student pregnant with her second child. She wanted to make sure any Republican replacement plan would not force her and her husband to pay for their own prenatal, labor and delivery charges. I don’t recall Senator Cruz’s answer, but he should have said she would be covered if she maintained continuous coverage. What he could not say is: why should the rest of us subsidize a $15,000 free medical benefit for her choices if she chooses not to maintain coverage?
Another audience member was a women with Multiple Sclerosis, who had moved from Texas to Maryland in order to qualify for expanded Medicaid coverage. She pointedly asked Cruz twice if “he would promise” that he would not take Medicaid. She did not say this but her annual medical care likely costs more than the median household income. To say the least her case is one where politicians fear to tread. How can you reassure people who lost the genetic lottery they will not slip through the cracks? Cruz did his best to explain how Medicaid is a poor quality health plan but his response did not suit her. She wanted his personal guarantee — in a legally-nonbinding way that would haunt his political career for years to come.
If there was a common theme it was that there are a lot of people whose lifestyles would be much improved if only other people would subsidize the cost of their health care. This gets back to a dirty little secret in the health policy community on willingness to pay for health care. The answer: “nothing!” Many people would prefer to pay nothing if left to their own devices. Many would go years without care — even primary care — until something bad happens. The liberal public health community is desperately grasping at straws trying to find the Holy Grail: perfect health literacy, great health care, provided cheaply on someone else’s dime. That is impossible, which is why Obamacare is so hard to repeal.