Low Prices, High Taxes?


The hallmark of the current U.S. health care system is its singular ability to screw over everyone involved. Behold the erstwhile Fair Share Act, which was supposed to help Maryland taxpayers shoulder the burden of a $4.6 billion Medicaid tab. In January, the state overrode Gov. Ehrlich's veto and passed the law, forcing Wal-Mart to spend 8 percent of payroll on health care or pay the difference into the state's Medicaid fund. Yesterday a federal judge ruled that the law "imposes legally cognizable injury upon Wal-Mart" and killed the idea, which was threatening to spread to other states.

Employers like Wal-Mart don't have strong incentives to offer comprehensive policies, and in a better world, no one would expect employers to provide health care at all: Wal-Mart would convert all of its health care benefits to salary and insurance companies would be selling plans (preferably based on the real expected cost of coverage) to individuals. (Bonus to public-health-types: Being a fat smoker would be costly.) The shift would do for insurance what Wal-Mart has done for pretty much everything else—package the product around the demands of individual consumers rather than employers and providers. Employer-provided coverage is an idea as dated and moronic as—well, as keeping medical records on paper in file cabinets, restricting HSAs to high-deductible plans, requiring a doctor's permission to obtain contraception, etc., etc.

Newt Gingrich, who is crazy, has some less crazy health care proposals.

Julian Sanchez reviewed the anti-Wal-Mart flick The High Cost of Low Price back in March.