Employer Insurance Mandate Will Increase Jobs And Save Money
Far from prompting employers across the country to cut jobs, a national "play or pay" policy for businesses would actually create many more employment opportunities and save the country money at the same time, according to two reports released Tuesday by three California health analysts.
Their studies were bolstered by a petition signed by 330 economists , business leaders, academics, and health experts advocating universal coverage in a health reform package as a way to improve the economy.
"A lot of people are saying that given the dire economic straits that we find ourselves in today, we can't afford to undertake healthcare reform," said Jonathan Gruber, a petition signer and MIT health economist who was U.S. Department of the Treasury deputy assistant secretary for economic policy in 1997. "The key point of this statement is to point out that's exactly backwards. This is exactly the time we have to act to reform healthcare in the United States."
The reports and the petition were released yesterday in a news conference organized by Campaign for America's Future, a left-leaning Washington, D.C. political group advocating social reforms, including healthcare policy change such as universal coverage.
The first report, by Phillip Cryan of the Goldman School of Public Policy at the University of California at Berkeley, said a pay or play option route to guarantee everyone health coverage will "most likely" cause significant job gains for five reasons:
1. The country will reap enormous savings by requiring employers that don't provide comprehensive health insurance to their workers to pay a new payroll tax to help fund public health insurance for those workers. Their new health insurance coverage would allow people to obtain medical care long before their health issues became so acute that they require expensive hospital care, Cryan says. And that could create jobs.
2. With more people seeking care, more jobs will be created in the healthcare sector.
3. Workers who previously had no health coverage would now be healthier and more productive.
4. Workers who want to leave their jobs, but don't because they fear losing their health coverage would now be free to do so, making the labor market more efficient.
5. Some employers who now provide expensive coverage might choose to pay instead of play.
Cryan said that with a play or pay option "at the very worst, job losses would represent a few hundredths of 1% of employed workers."
The other report, by University of California at Berkeley policy analysts Jacob Hacker and Ken Jacobs, discussed how a pay or play plan might be modeled after one now in effect in San Francisco and why two statewide attempts at broader coverage proposals failed. Special statewide constraints exist in California that may not apply at a federal level of health reform, they wrote.
One major criticism of the play or pay proposals, Hacker and Jacobs wrote, is that the public pool would be straddled with expensive cost burdens weighted by a lot of unhealthy workers. Presumably, firms with the most medically costly employees would enroll their employees in the pool.
However, the report said that assumption is incorrect.
"Although some of the uninsured are in poor health (in part because they lack insurance), many are young and inexpensive to insure," according to the report. "Past estimates suggest that the overall costs of uninsured Americans should be about equal to the rest of the population once they are covered."
Cheryl Clark is senior quality editor and California correspondent for HealthLeaders Media. She is a member of the Association of Health Care Journalists.
- Primary Care Docs Average More Hospital Revenue Than Specialists
- 69% of Employers Plan to Offer Healthcare Coverage After 2014
- How Chargemaster Data May Affect Hospital Revenue
- House Lawmakers Grill CMS Over Health Exchange Navigators
- ED Physicians Key to Half of Hospital Admissions
- Insurer's App Aims to Lower Healthcare Costs, Securely
- Don't Let Nurses Sink Your Bottom Line
- Q&A: Catholic Health Initiatives' New Senior VP for Capital Finance
- Building a Better Healthcare Board
- Hospital Pricing Irks Nurses; More Jobs, Less Pay