Washington DC – As the debate in the Senate over health care intensifies, a new analysis from the Center for Economic and Policy Research (CEPR) cautions that the Senate bill lacks an effective employer-responsibility provision.
“While the House bill ensures that the costs of health care coverage are shared by individuals, businesses and the public sector, the Senate bill creates an incentive for some large employers to shift a portion of their fair share of costs to the public sector, their employees, and other, more responsible employers,” said Shawn Fremstad, author of the analysis and Director of the Bridging the Gaps Program at CEPR.
The analysis “Free Ride: The Senate Health Bill’s Approach to ‘Employer Responsibility’ Means Some Large Employers Get to Take It Easy,” examines employer responsibility for employee health care coverage in the Senate health care bill. The paper shows that the Senate health care bill creates an incentive for some employers to shift workers from full-time to part-time status in order to avoid responsibility for providing health care coverage to their employees. In addition, low-wage employers who provide coverage that is unaffordable for some of their employees will have an incentive to maximize the number of their employees who are eligible for Medicaid.
Leaders in both the House and Senate support the idea of “shared responsibility” as a basic principle of health care reform. Though lawmakers in the House have held firm to this principle, those in the Senate are on the verge of creating a free-rider dilemma that betrays this commitment.
The full analysis can be found here.