Christian Schneider makes a great point at the WPRI Blog about the danger of the senate Democrats' health plan (I will not refer to it by its brand name) becoming a magnet for the sick and uninsured . Insurance companies call this adverse selection and, when it happens, you go broke.
The problem is that the plan will cover even newcomers to the state as long as they are, essentially, "gainfully employed" (including self-employment like, for example, blogging for money), pregnant or a child living with his or her parent. Christian thinks that it is easy enough to get a joe job (in the Canadian sense) or say that you are self-employed, but the problem is worse than that.
There is this thread of constitutional analysis, most notoriously expressed by the U.S. Supreme Court in a case called Shapiro v. Thompson and more recently in Saenz v. Roe, that suggests that a state may not deny benefits (at least not benefits pertaining to the "necessities of life") to newcomers.
Thus even the few roadblocks that the current version of the plan puts in the way of Wisconsin becoming America's ER may not stand and fixing the bill to keep folks from coming here for the health care will be tough.
Even if you think that this would not happen (and I don't know why it would not), the argument that this is a fee (as opposed to a tax) or that it just replaces costs that businesses already incur is false. Even for employers who offer insurance, the plan will hurt companies with relatively well paid employees (think of a professional firm) even if it helps those whose employees are less well compensated. (And it may not do even that as cash compensation is bid up - something the plan's proponents have to hope will happen.) As for employers for whom the market does not currently warrant the provision of health insurance, forget it. For Wisconsin to adopt a plan like this will have a significant impact on the state's economy and it won't all be good.
The problem is, that by continuing the historic accident of tying the payment of health care to payroll, it distorts the market and market distortions generally dampen production. Particularly, as Christian points out, when you try to go it alone in a big country with porous state borders, you are going to get killed.
This all suggests a topic for a future post. Democrats try to chide Republicans by ignoring scientific consensus on global warming. I don't buy into that, but don't Democrats (at least the leftier versions) routinely disregard the consensus among economists on things like minimum wage laws, price controls, protectionism, high marginal tax rates, etc.?
C'mon, guys. The science is in.