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Health Insurance Pay Or Play

by EINSURANCE

Here's some good news for families struggling to meet high health insurance premiums because their employers don't provide coverage.

The Christian Science Monitor reports today that a growing number of states are adopting a controversial health care program known as “Pay or Play.” In essence, this program gives businesses a choice: provide health care for their workers, or pay into a state fund that will do it for them.

Surprisingly, the initiative—which is in full swing in New York, California, and Washington state—has found a core of support among the business community. Though the Monitor provides little detail, it seems support among businesses falls into two categories: small businesses who stand to get a better deal on premiums from that state fund than from their insurers, and larger concerns that already provide insurance to their employees, have nothing to lose, and are seeking a nice community-service bullet for their corporate resumes.

In California, the Gray Davis-era initiative has seen enough resistance that major opponents Wal-Mart and McDonald's have managed to get a referendum on the ballot, which asks voters to rescind the law before it takes effect in January, 2006.

Most of the arguments, both pro and con, center around cost. Opponents of such initiatives contend that the forced insurance plan could cost their states billions in subsidies and drive many small businesses under water. Supporters answer that their states will save just as many billions by reducing the number of uninsured patients in state health-care systems.

One thing is sure, particularly as a general election looms just a few weeks away: companies don't vote, but people do. The Census Bureau reported a year ago that over 15% of the U.S. population—over 40 million people—were without health coverage during the entire yar of 2002. As national frustration rises over health care costs, voters may very well pass the first workable solution placed before them, no matter what the economic implications for the long term.

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