Economists propose ditching penalty for companies that don’t offer health coverage

    The employer mandate has been one of the most unpopular parts of the Affordable Care Act — especially among business owners. Now health economists are also lining up to say the penalty is a bad idea that won’t do much to reduce the number of uninsured people in the United States.

    Economists at the Urban Institute in Washington D.C.–and separately — Mark Pauly at the University of Pennsylvania’s Wharton School ask: Why not just eliminate the employer mandate?

    The Obama Administration has already delayed the health-law penalty for large companies that do not offer insurance coverage to their workers. The economists say perhaps the next, best step is to throw out the requirement completely.

    The policy watchers offer several arguments — one is the idea that that all low-wage employees should have access to government discounts and tax help to buy health insurance, but right now, those subsidies are only available through the Obamacare insurance marketplace.

    Robert Field, professor of Health Management and Policy at the Drexel University School of Public Health, said he doesn’t expect the Obama administration to change its stance on the employer mandate — but he’s willing to play “What if?”

    “Without the mandate, I think you are going to see companies continuing to provide health coverage,” Field said. “So, I don’t think there’s suddenly going to be a flight from health insurance. I don’t think, all of a sudden, every company is going to dump the benefit and dump people into exchanges.”

    Many experts have said that companies use health benefits as part of a bag of tricks to recruit and keep highly valued workers.

    “I don’t think the Obama administration is going to do anything around actively doing away with employer provided health care,” Field said. “I think what they might do is continue to delay the mandate, letting some of the smaller and medium-sized companies off the hook — and letting them send their employees in to the exchanges. And that’s going to be a grand experiment.”

    Neil Goldfarb, who leads the Greater Philadelphia Business Coalition on Health, said the latest debate over the employer mandate doesn’t do much to move us toward what he sees as the true goal: access to coverage for all Americans.

    “We’ve never had a level playing field in the U.S. health care system, we’ve had a patchwork quilt of federal and state and local programs, trying to provide different levels of access,” Goldfarb said.

    The as yet unenforced mandate applies to companies with 50 more workers.

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