From the San Francisco Chronicle, a federal judge ruled earlier today the City of San Francisco can continue with its law providing universal health care for adults.

From the Chronicle:

A three-judge panel of the Ninth U.S. Circuit Court of Appeals granted the city’s request to suspend a federal judge’s Dec. 26 ruling striking down a key funding provision of the ordinance. That provision requires large and medium-size companies to offer insurance to their workers or pay a fee to the city.

The appeals court said the city was likely to prove that U.S. District Judge Jeffrey White was wrong when he ruled that local governments lack the power to require employers to make financial contributions to a health care program. Today’s decision allows the city to enforce the entire ordinance while it appeals White’s decision.

While it has been talked about in the ruling, one of my first questions is what government body if any has the right to mandate and administer health coverage like this? I don’t think any of them do.

If the law is upheld after all the appeals are settled, what effect will it have upon San Francisco? While more employees will have some kind of health coverage, there will be other unintended side effects. If a company that does not offer health insurance suddenly has to pay fees, they will have to cut costs. Since it is money that is ultimately being spent on employees, some businesses will take this money out of the salary of their workers or even lay some off.

This requirement will also discourage companies from setting up shop in the city. If a business owner wants to open offices, he will have a reason to avoid San Francisco and find a nearby city without such a law.

As for the coverage itself, there is no guarantee of quality with any kind of government backed plan. While the current medical insurance industry has problems, companies or individuals that buy into it have the option of switching to a different provider. With the government backed coverage, there is no choice. Unless people can opt out of the program (from what I know they cannot), if the coverage quality nosedives they will still be stuck paying for bad insurance.

Health coverage is important and there will always be people willing to pay for it. The government should stay out of the process and let people and companies keep more of their money and make their own decisions.