A new study released today by the Economic Policy Institute that concludes that claims of massive jobs losses if a ‘play-or-pay” proposal was enacted as part of health care reform are vastly overstated. In fact, health care reform in general, based on the Obama principles, would produce significant job gains, the EPI wrote.‘Play or pay’ policy as a part of health care reform would require that employers either provide health insurance to their workers or pay a penalty as a percentage of their payroll in order to assist low- or moderate-income families to obtain quality and affordable health care.
Under the House Tri-Committee discussion draft proposal, employers who choose not to provide basic health insurance to workers would have to pay an 8 percent penalty based on their overall payroll. Those workers would then be able to choose a plan that best meets their needs from a menu of insurance options in the national health care exchange, which would include both private plans and a public health insurance option.
The EPI also found that past studies that claim significant job losses as a result of ‘play-or-pay’ were based on proposals not on the table today in either the House or the Senate.
View the EPI analysis of ‘play-or-pay’.
Key Conclusions from the EPI report
What about other studies that show significant job losses associated with play-or-pay?
More information on the Tri-Committee discussion draft.
- “It is highly unlikely that a health care reform package including a play-or-pay policy will lead to job losses. On the contrary, such policy reform is likely to cause significant boost to employment.”
- “In short: concerns over job losses from comprehensive health care reform proposals that include play-or-pay employer contribution are overstated and unfounded.”
- “Moreover, it is likely that the positive effects on employment from health care reform will surpass by several orders of magnitude any modest job losses caused by a play-or-pay policy considered in isolation, providing a substantial boost for the U.S. economy and U.S. workers.”
What about other studies that show significant job losses associated with play-or-pay?
- “Prior studies instead modeled a requirement that all employers provide private health insurance to their employees. With average costs of compliance of 40% of payroll or more for employers facing such a requirement, it is not surprising that those prior studies found much larger effects on employment that would be expected from a play-or-pay policy with a cost of compliance of just 4-8% of payroll.”
More information on the Tri-Committee discussion draft.
