Job Loss due to Health Insurance Mandates

Abstract

The proposed Health Security Act provides universal health insurance by extending the current employer-based health insurance financing system. It requires employers to pay approximately 80% of the health insurance premium for each of their workers. Experience with other legislation requiring employers to provide benefits to their employees indicates that most of the cost of a mandated benefit is shifted to employees in the form of lower wages. However, for workers without health insurance and with earnings close to the minimum wage, minimum-wage legislation prohibits employers from lowering wages in response to a health insurance mandate. These employers can be expected to respond by cutting employment. Recent evidence from employer reactions to increases in the minimum wage suggests that approximately 100,000 jobs would be lost due to the Health Security Act's employer mandate.

State Health Insurance Regulation and Self-Employment Rates After the Great Recession: The Role of Guaranteed Issue Mandates

“…Broadly, cross-country studies (Bjørnskov & Foss, 2008;Nyström, 2008), and some subnational work in the United States (Goetz & Rupasingha, 2014), have found self-employment robust when government ensures economic and legal stability but is otherwise small. Other work links employer insurance mandates to job cuts (Klerman & Goldman, 1994) and to reductions in new firm formation (Jackson, 2010).…”

The Financial Side of Autism: Private and Public Costs

“…Results of empirical studies of these expected effects have been inconclusive, however. (Boulder, et al, 2009;Collins et al, 2005, Hopkins & Zweifel, 2005, Klerman & Goldman, 1994, Sommers, 2005, Wolaver et al, 2003. Actuaries with The Council on Affordable Health Insurance estimate an autism mandate will increase the cost of health insurance by about 1 percent, but caution that increasing prevalence rates coupled with coverage of more services could drive premiums up 1 to 3 percent (Bunce, 2009).…”

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“…As employers adjust to the new fiscal realities of the policy, their need to shift resources away from wage compensation toward insurance compensation may adversely affect the employment market. In businesses, which employ large amounts of minimum-wage workers, this may prompt an increase in part-time and temporary employment and a greater degree of unemployment for those at the bottom of the wage-skill hierarchy (Klerman & Goldman, 1994). As a result, the natural consequence of the policy might be to create additional unemployment for workers who will be unable to afford even subsidized individual insurance and therefore will seek treatment in the free care system.…”