Some People Work In Order to Get Health Insurance
And before going on, there is nothing wrong with that. They also work in order to have food, shelter, etc. As reported by Rick Newman at Yahoo Finance:
A new study distributed by the National Bureau of Economic Research finds that somewhere between 530,000 and 940,000 Americans might quit their jobs after January 1, 2014, as they’re able to get affordable health insurance through one of the public exchanges to be set up under ObamaCare…
Study authors…arrived at their estimate by studying changes in Tennessee’s Medicaid program, which expanded in 1994 to include more people, in ways similar to the way ObamaCare will be structured. Costs became unaffordable, however, and a decade later the state forced about 170,000 childless adults — roughly 4 percent of the state’s working-age population — out of the program.
The researchers focused on what those people did for insurance once they could no longer get it through the state. For starters, there was a sudden surge in Google searches emanating from Tennessee and including phrases such as “job openings,” while there was no such surge in neighboring states. In the two years following the change, employment levels among childless adults in Tennessee — the same group knocked out of Medicaid — rose by 5.7 percent, a far bigger jump than elsewhere. And sure enough, by 2006 there was a sharp increase in the percentage of Tennessee adults with private insurance. Losing subsidized public insurance, in other words, forced more people to get jobs.
The opposite may happen with ObamaCare, since under the program, anybody under 65 should be able to get insurance at a public exchange, with no income requirement except that those who earn more will pay a bit more for coverage.
This is very likely, although I’m not quite sure that it is a bad thing. If the sole reason for having a job was insurance, not money needed for provision, then transitioning those money making opportunities to people who need the money is a good thing.
This may be a pleasant side-effect, but the most important lesson is that employer-provided coverage is a subpar system.
“530,000 and 940,000 Americans” might be in for nasty surprise when their access to care plummets. They would be wise to keep their jobs or find jobs that will remain providing coverage.
Are we assuming that these people would leave their jobs? I didn’t see a survey in the study and only math models and predictions, some of it based on google searches and things that don’t convince me of this.
I don’t know, you can never be too careful with taking someone else’s “word for it”, but this result seems logical. Many low-income earners are likely to be better off quitting their jobs, accepting the subsidy and spending their free time on leisure or “free lance” work.
I believe this has been recognized for a while, though mainly in terms of retirement.
Many individuals forego early retirement (and even retirement at 65) for fear of giving up the health insurance benefits provided through their workplace.
This causes dislocations for younger adults looking for jobs.
That study makes no sense. I totally agree that it is fine to work to have health coverage as well as food and shelter. Why in the world would people quit their job just for the health coverage factor? That part is what just makes no sense.
Because health insurance is very valuable. People below a certain income threshold will receive a health care subsidy. If you work, you might not get the subsidy, but not working you might get it. For many people, if they have health insurance, the money they get from working doesn’t give them much marginal gain.
The difference is that most people don’t obtain food and shelter directly from their employers. It’s one thing to work to obtain money to purchase health coverage…
He actually suggests that the United States has an “employment lock.”
“This occurs when individuals supply labor primarily to secure private health insurance through an employer. If such individuals could instead acquire affordable health insurance apart from their employer, many of them would exit the labor force entirely. As a result of employment lock, policies that expand access to health insurance apart from employers (such as the ACA) may have large labor market effects.”
And if the ACA opens up more options then I would say it increases overall utility.
But these people will be receiving subsidized health insurance. Also known as the government giving them money.
“In a 2010 Budgetary Outlook, the CBO estimated that all of the combined features of the ACA will result in an approximately 0.5 percentage-point decline in the aggregate employment rate”
That’s a pretty big labor market distortion.
But the government is already giving them money.
A worker with a modest income in the 30 combined federal tax bracket (15% income tax + social security + medicare) is receiving a subsidy worth 30 percent of the employer-sponsored premium.
How that compares to ACA-subsidized options is an open question.
There are too many issues with how limited we are on economic and social policy. Hopefully in the future we’ll understand how to better formulate policies.