EPI: Passage of Washington’s ‘Play or Pay’ Health Care Proposal Would Kill Up to 25,000 Jobs

February 17, 2005

Washington legislators reportedly hold the fate of up to 25,500 of its least-skilled workers as they consider passage of a “play or pay” health care mandate on Washington businesses.

A study conducted by The Employment Policies Institute (EPI) reveals new data on the devastating costs and labor market consequences of the recently proposed Health Care Responsibility Act (HCRA), which would require all employers in the state with more than 50 employees to provide full medical insurance for their employees.

The findings were presented by EPI’s research director in testimony before both the House Health Care Committee and the Senate Health and Long Term Care Committee.

“California voters rejected a similar ‘pay or play’ health care mandate at the ballot box last year and rightly so,” said EPI research director Craig Garthwaite. “This approach to health care is an exorbitantly priced proposal that will result in unintended consequences and minimal positive return for Washington’s uninsured.”

According to EPI, despite the intent of HCRA to provide coverage for the uninsured, the poorly targeted plan and high cost of having to meet the rich mandated benefit package will result in a cost of $10,200 per newly insured individual, significantly more than the cost of coverage.

The bottom line price tag to business is nearly $1.6 billion in the first
year. Many employers will respond to this by decreasing employment — resulting in as many as 25,500 in lost jobs. EPI noted that nearly 50 percent of those to experience job loss are more likely to be a high school dropout and 33 percent more likely to be non-white.

The most troubling news about HCRA’s high price tag and enormous job loss is the fact that the majority of the uninsured will reportedly remain without coverage.

Only 18 percent of uninsured Washingtonians will reportedly have access to new health insurance coverage. Even worse, despite an exceptionally high cost, HCRA reportedly fails to provide insurance to even the majority of working uninsured residents in the state.

EPI’s research findings on HCRA were derived from data sets of the March 2003 Current Population Survey of the U.S. Census Bureau and Bureau of Labor Statistics.

“Providing insurance to the uninsured is a laudable goal, but HCRA is an extremely poor vehicle for doing so,” said Garthwaite. “The staggering price tag to business will lead to tremendous job loss to Washington’s least-skilled workers while an overwhelming number of uninsured will remain without coverage.”

Visit http://www.EPIonline.org to download “The Cost of Washington’s
Healthcare Responsibility Act”

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