Insurance Mandates and Wages

The proposals now before Congress would require just about everyone to buy health insurance or to get it through their employers — which would generally result in lower wages.

via Economic View – How an Insurance Mandate Could Leave Many Worse Off – NYTimes.com.

I posted this link the other day, but I think it’s worth further emphasis. By mandating insurance coverage, people are made poorer. If it’s an individual mandate, people have less money. If it’s an employer mandate, their wages will have to go down (you can’t spend more on an employee than they make for your business).

Advocates of a mandate say that by bringing in healthy young people, insurance costs will be reduced and the savings will offset a reduction in wealth. I don’t buy that for a second. First: the problem is the cost of care, not the cost of insurance. Second: the increased paperwork from bringing several million people into the current system will increase total costs. Third: getting young people to foot the bill for old people doesn’t reduce the bill, it just passes it on to someone who is already facing a lifetime of paying Social Security taxes and understanding that nobody will be paying for their Social Security payments.

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