Obamacare never fails to make it a big news, and now again it made the headlines through the Urban Institute report that suggests that the employer mandate has put negative effects on labor market, specially on lower-income Americans.
Although, the findings are not new to everyone, but the reminders that it has released, directly show that Obamacare nearly broke the labor market.
Here are the major ones:
On short term basis, research proposes that removing the mandate will not minimize the insurance coverage significantly. The institute estimates that the coverage will be reduced by 500,000, but the gains in coverage in Medicaid and exchange coverage of 300,000, will lead to a net loss of 200,000.
Killing this mandate would purge out the government revenue to be generated through penalty payments.
This dropping coverage uncertainty has raised questions over how much the revenue collection would be affected. Urban Institute has estimated that the approximate reduction in revenue will be around $46 billion and the government will need to replace the revenue sources in order to compensate for the same. This implies that if the funds to be collected through penalizing employers would not be replaced by any other source, then a part of Obamacare bill will be left unpaid.
Therefore, the news has come up as a reminder that the health care reform is still distorting the labor market. As per the study, building random thresholds like that of penalties for employers having 50 or more workers working 30 or more hours per week, for the purpose of filling financial requirements will change employment decisions in small organizations, and adversely affect the workers. In addition, the costs would also be taken out by giving lower wages to labors. Thus, Obama administration must do something for the mandate as it will greatly exploit the benefits of low-wage individuals.