The Real Cost of Play or Pay

The Heritage Foundation published an excellent analysis of the real cost of the Play or Pay Mandates in the Health Care Reform Bills.  Written by D. Mark Wilson, it discusses in detail the three main health care reform bills that Congress is now debating.

Mr. Wilson makes an analysis that should be required reading for every person in America. I believe that including a “Play or Pay” Mandate in any health care reform bill would be catastrophic for America.  Why?  Because I firmly believe that requiring employers to either provide some level of health insurance or surrender a huge percentage of payroll to the government will result in job losses and lower wages.  Many businesses that would be subject to play or pay penalties simply can’t afford them.  They would be forced to make one of two decisions – lay off some of their employees or lower wages to cover the costs.

There is a lot of confusion over what exactly “Play or Pay” means.  It would require companies to pay the government a set amount (Senate Bill) or a percentage of their gross payroll (House Bill) if they don’t offer health coverage.  This, of course, is a simplification of these very complicated bills, since each bill differs in the penalties and in which employers would be subject to its provisions.

D. Mark Wilson points out that “the three main health care reform bills that Congress is currently debating each include a play or pay employer mandate.”  Actually, most people believe that there are two main bills under discussion, H.R. 3200, which has been voted out of the House Committee, and the Senate Bill, which was passed by the Senate Health, Education, Labor and Pensions Committee.  There will probably be a third bill, which will come out of the Senate Finance Committee, but as of now, there has been no vote on that bill by the Committee.

Mr. Wilson makes the point that “the play-or-pay mandates in these bills, which require employers to offer health insurance to their workers or pay a tax to the federal government, will affect between 95 million and 105 million workers, and 509,000 to 1.4 million employers, including up to 1 million small businesses.”  That is a staggering analysis in and of itself, but then Mr. Wilson goes on to say that “the mandates will put 5.2 million low-wage workers at risk of unemployment or reduced working hours.”

Our economy simply can’t absorb that kind of blow.  An already staggering economy would suffer a blow that would take years to recover from, if we could recover at all.  Mr. Wilson notes that “the mandates will cost businesses at least $49 billion per year.”

The American people have made it clear that they do not want the government to make any decisions involving their health care.  Play or Pay is yet another example of why they feel that way.  Irresponsible legislation, which the health care bills presently on the table clearly are, need to be discarded.  Let’s fix what needs to be fixed, help the neediest Americans and leave the 80% of Americans satisfied with their health care alone.

Cross posted at Huck PAC.

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