Some commentators are on the left have been cavalierly dismissive of the Wisconsin Policy Research Institute's analysis of the Wisconsin Health Plan, shooing it away because its authors raise what are some fairly commonplace economic concerns about government-provided healthcare and the anomalies that arise when those who decide on whether to use something are not those who pay for it.
Seth Zlochota suggests that we need not even read the WPRI study, in part, because the guys who wrote it aren't all in on government health care.("All [they]do is lay out a theoretical groundwork for why we shouldn't have health insurance.") My Backstory colleague Jim Rowen who might have carefully analyzed the study chooses to tell us that we don't need to because the WPRI represents something called Corporate Libertarianism as if economic facts can be dismissed as "mean" and "selfish."
The WPRI, like the Legislative Fiscal Bureau before it, makes what seems to be an unassailable case that the Wisconsin Health Plan could not be funded by payroll taxes ranging to 12%. The WPRI estimates that an average (not maximum) payroll tax of 17.1% (according to the current allocation, 15.1% on the employer and 2% on the employee) would be required.
WPRI critics like Seth dismiss by arguing that the state as the doorkeeper for qualifying health plans could negotiate big provider discounts but, if WPRI were right, the simple expedient of having the state pay for health insurance would result in a 25% reduction in costs. It is hard to believe that could happen, unless it occurs in the same way that the Canadian government has reduced costs, i.e., by making more expensive care (e.g., surgeries) less available.
WHP proponents say that the payroll tax will simply replace all (or, as WPRI corrects) most of what employers pay for health care now and there is a great deal of truth in that. Maybe an increase in employer costs is a fair tradeoff for increased coverage and decoupling coverage from one's current job (which itself causes economic inefficiencies).
But there are reasons to pause. A 15% tax on adding new payroll (both new jobs and salary increases) may have serious economic consequences, depressing labor intensive businesses, supressing wage increases and putting certain Wisconsin businesses at a competitive disadvantage.
Providing a free policy with state mandated benefits effectively politicizes health care. What will and will not be provided and how quickly it will be provided and at what quality becomes - increasingly - a political question (although the WHP as initially conceived does retain some elements of competition and consumer choice.) This not obviously better than the current system. It will solve some problems, but it will create new ones.
My own sense is that there is a case to be made for mandating that everyone over the age of 21 buy and maintain a high deductible policy with some type of subsidy (health insurance stamps?) for low income persons combined with health care saving account (again perhaps with subsidy for poor persons like the WHP). The mandatory aspect may be required because of the "free rider" problem inherent in health care. We are not going to (and should not) turn seriously injured or ill persons away from emergency rooms because they did not - or could not - buy insurance.