NCPA - National Center for Policy Analysis

MANDATED HEALTH CARE YIELDS JOB LOSSES

November 29, 2005

As health care premiums and the number of uninsured Americans continues to rise, policy makers are experimenting with mandates that require employer-paid health insurance, however, these mandates create job losses that hurt employees who belong in traditionally vulnerable groups, say Katherine Baicker and Helen Levy (Employment Policies Institute).

According to a study of the potential effects of a nationwide mandated health care legislation, says Baicker and Levy:

  • About 315,000 Americans will lose their jobs and wages will be lower for a million more due to the cost of the mandates; over half of those who lose their jobs will be nonwhite and will come from economically vulnerable groups.
  • Employees who work but don't have insurance are three times more likely to be high school dropouts and twice as likely to be from a minority group, however, one-quarter of the working uninsured have access to employer-provided coverage but have declined to enroll.
  • Furthermore, most employees without insurance are more likely to work for small firms that are exempt from the mandates; nearly 45 percent of the uninsured work in firms with fewer than 25 employees, while only 19 percent of insured employees work in these small firms.

The study shows that concentrating on large firms while ignoring the disproportionate presence of the uninsured in small firms is a large factor in the failure of mandated health insurance laws to reach the majority of the uninsured, says Baicker and Levy.

Source: Editorial, "EPI Research Estimates Job Loss from Mandated Healthcare," Employment Policies Institute, September 2005; based upon: Katherine Baicker and Helen Levy, "Employer Health Insurance Mandates and the Risk of Unemployment," Employment Policies Institute, June 2005.

For study text:

http://www.epionline.org/studies/baicker_06-2005.pdf

 

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