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Obamacare 2.0: An Employer Mandate Should Not be the Solution

As details of the latest health care reform plan surface, Americans should remain committed to asking the right questions and demanding more common-sense from our President and lawmakers. The heavy turnout for town hall events in August and the overwhelming polling data showing the publics dissatisfaction with current health care reform proposals are telling. Americans see their leaders trying to rush through complex and far-reaching changes that will have unforeseen cultural and economic consequences.

Ed Feulner, President of The Heritage Foundation, writes, The health care industry is worth $2.5 trillion a year, comparable with Britain’s entire gross domestic product and larger than that of most European countries. Can you imagine Britain’s entire economy being reordered by a few people working secretly in backrooms in a matter of weeks? What are the chances they could ever get that right?

Contrary to some claims, Obamacare does not provide more choices to patients or promote legitimate competition. And it certainly does not control costs. One of the most troubling provisions in current health care reform proposals is an employer mandate, also known as a play-or-pay mandate. Such a provision would require employers to offer health insurance to their employees or pay a tax to the federal government.

An employer mandate would be:

Far reaching — Between 95 and 105 million workers, over 500┬áthousand employers, and up to 1 million small businesses would be affected.

Extremely Costly — Employers who would not offer qualifying health insurance would shell out over $23 billion in taxes to the federal government. And depending on what type of plan the employees enroll in, the added cost of providing 3 million more workers with qualified health insurance is $11.3 billion to $14.6 billion a year. Add in the nearly $15 billion cost of increasing the share of the premium employers pay in order to meet the House mandates coverage standard and employers are left with a staggering $49 billion in costs.

A Potential Job Killer 5.2 million low-wage workers, some of the same workers health care reform is intended to protect, would be put at risk of unemployment or reduced working hours. Disproportionately affected are workers in the food preparation industry, as more than 1 million such workers would be at risk of losing their jobs. Further, the prospect of fewer job opportunities in the future will put another 10.2 million workers at risk of slower wage growth and cuts in other benefits.

Forcing employers to provide their workers a mandated health care plan or pay an additional tax is unfair and detrimental to wages and jobs. Americans arent required to go to their employers for auto insurance or homeowners insurance. Neither should they be forced to rely on their employers for health insurance. Individuals and families should be free to choose, own, and pay for their own plan if they opt to do so. Heritage supports health care reform that provides choice in coverage.

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