David Hogberg hit the nail on the head with a blog post the other day about something that bugged me: Katharine Lyon, an advocate of increasing government mandates in private health care claiming that businesses will be glad to spend more money on health care premiums for their employees, because the result of higher premiums will be less absenteeism and better work.

The mandate she wants is for mental health services, which makes it a particularly ridiculous claim, but the notion that employers will be glad to spend extra money is so wrong-headed that it would bug me even if it was something else.

First of all, plenty of employers struggle just to meet payroll. You hardly ever get the sense that those who lobby governments to force businesses to spend more on payroll have ever built a successful business or met a payroll regularly. These advocates don’t seem to realize that the more expensive they make employees (by increasing mandated benefits, mandating ever-increasing minimum wages, and payroll taxes), the fewer employees businesses will have.

David Hogberg said it well:

The implication [of Kathararine Lyon’s statement] is that businesses that do not offer mental health parity as part of their health insurance packages are ignorant of the benefit it has of increasing profits. When employees have mental health benefits on par with other benefits, they skip work less often and are more productive, thereby increasing the amount of revenue taken in by the businesses they work for. And do those added revenues exceed the added cost including mental health parity in a health insurance plan? Of course, they do! Otherwise, there would be no increase in profit.s Thus, if we follow Lyon’s reasoning, there is little reason to worry about forcing businesses to offer mental health parity, because doing so will be good for them.Here is the question that the likes of Lyon never ask themselves: If mental health parity is so good for the bottom line, why aren’t more businesses already offering it?…

…The fact that businesses are not doing this almost certainly means that employers have figured out that the benefits of things like decreased absenteeism do not exceed the increased health insurance costs due to adding mental health parity. That’s the market sending us a loud and clear message, but the likes of Lyon seem to have no interest in listening.

Alas, the problem isn’t that businesses are ignorant of the benefits of mental health parity. The problem is that the likes of Lyon are ignorant of how markets work. However, that would be no problem at all if Lyon wasn’t intent on using government to force her ignorance on the rest of us.

I guess what bugs me most is that the advocates of forcing employers to provide mental health coverage lie by claiming it will save employers money. It won’t, and that’s not why they are advocating this coverage. They should be honest about the costs. If they can’t convince lawmakers to go along with mandates without embellishing arguments with fiction, their cause deserves to fail.If advocates of adding mental health parity mandates to private health insurance can’t make a convincing case without resorting to fiction, they should acknowledge that a convincing case can’t be made.