Monday, October 26, 2009

This sounds wrong

Either this doesn’t mean what is sounds like it means or the Senate is about to do something really dumb. In describing what the health bill put together by Senate Democrats is likely to look like the Wall Street Journal (via neoneocon) writes:

Details of the legislation could change, but its broad outlines are becoming clear. Employers with more than 50 workers wouldn't be required to provide health insurance, but they would face fines of up to $750 per employee if even part of their work force received a government subsidy to buy health insurance, this person said. A bill passed by the Senate Finance Committee had a lower fine of up to $400 per employee.

To me that means that if MidSize Company, Inc., doesn’t offer its employees health insurance the Federal government will leave it alone if none of those employees need government help to buy health insurance on their own. However, if even one of the employees of MidSize applies for a government subsidy to buy health insurance, the Feds will hit MidSize with a bill for $750 per employee.

If I’m right about what this means, has no one writing this bill considered that they are creating a very strong incentive for employers to refuse to hire anyone who seems likely to get government help to buy health insurance? Employers who don’t want to provide health insurance will favor applicants whose spouses have health insurance; applicants who don’t have children; applicants who are young; and applicants who have never had any health problems. Furthermore, if I understand the provision correctly, employers will have a very strong incentive to fire any employee who applies for a subsidy to buy health insurance. Worse yet, it will be a cold day in hell before a company with 50 employees and no company health insurance plan hires any more workers. So much for improving the employment picture.

I’ll be delighted to be told I’ve completely misunderstood this provision.

(I’ve written about what seems to be a similar provision in KennedyCare. See the footnote to this post.)

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