Dept. of Unintended Consequences File: ObamaCare Will Hurt Poor Women with Kids

Steven Horwitz

This is an argument about ObamaCare I hadn't seen.  A provision in the legislation penalizes firms who don't provide a level of insurance coverage comparable to the government-set "minimum essential coverage" IF at least one of their employees must use government subsidies to be able to afford the employer-provided coverage.  In other words, if tax dollars are paying for the insurance of even one employee and the firm doesn't provide the minimum coverage, it will face substantial financial penalties.

The idea, of course, is to force firms to provide the minimum coverage.  But, alas, the more likely response by firms is to not hire employees who are likely to need subsidies to cover their costs because that will mean the firm has to spend more on providing insurance to employees.  Who are those employees likely to be?  Lower-income folks and especially those who need more expensive family policies.  In fact, the penalties are higher if the subsidized worker has a family.  A prediction would be that more single moms will find themselves out of work.  Once again, government intervention produces not only results the opposite of its intentions, but harms the most vulnerable in the process.

As Carrie Lukas from Independent Women's Voice says, ObamaCare should unite the National Organization for Women and free marketeers in opposition.

UPDATE:  It's been pointed out to me that the Ezra Klein article linked at the outset is from September and refers to the Baucus bill that never really got traction.  However, this provision is in the bill that the Senate passed Christmas Eve.  You can go here to read the bill.  I'll save you the trouble of the search.  Go to p. 345, "SEC. 4980H. SHARED RESPONSIBILITY FOR EMPLOYERS REGARDING HEALTH COVERAGE."  The provision in question is still in there.

Comments

[Roger Koppl]

I'm using this in class Tuesday. Thanks for that, Steve.

[Jasper]

Wow, beaurocrats just don't get it.

[Peter Gordon]

I don't get it. Obama has so many best-and-brightest Ivy League brainiacs on his team. They can't be this dumb. Can they?

[The_Orlonater]

Those who try to engineer society from the top down are clearly insane.

[BobH]

And when there is an increase in single mom unemployment, they'll never understand the cause.

[John Moser]

I'm neither an economist nor a defender of this bill, but isn't one's job the main factor in determining one's income? Any unemployed person is pretty much by definition "low-income." If he or she then gets a high-paying job, then he or she is no longer "low-income." In that case, isn't the incentive for employers to pay their employees enough that they wouldn't need the subsidies?

[topills.com review]

Charity workers are similarly judged upon the reports of their work by donors, the charity itself, and 3rd party groups.