Health Care and Competitiveness

Greg Mankiw claims that transferring health care costs to a national program will have no effect on US corporate competitiveness (especially GM) in the long run because workers eventually pay the costs anyway. So, if they pay the cost by some alternative method, they then (in the long run) ask for more in wages. This argument misses a couple of important variables by assuming that employer provided private insurance and a national health insurance program are equivalent goods with similar costs and values.

1) The value to the worker of a given quality of health care is the same, whether it is purchased in efficiently through a private insurance scheme or efficiently through a national or regional (e.g. Canadian) system.
2) The value of health care coverage to the worker is greater if it not dependent on continued employment with a single employer.

Therefore, if workers get greater value by having health care coverage not linked to their employer and that greater value comes at a lower monetary cost -- their demands for additional compensation in the long run will be less than if they were getting inferior health care at a higher cost from the employer. Thus, Larry Summers is right and Mankiw and Elmendorf are missing the point.