U.S. House Panel Holds Hearing on Impact of Employer Healthcare Mandates

Employment Policies Institute testifies employer mandates are expensive, cost jobs, and ignore the vast majority of uninsured
  • Publication Date: May 2006

  • Topics: Health Care

Washington, DC – A panel under the House Committee on Education and the Workforce held a hearing today on the impact of employer-provided healthcare mandates. Craig Garthwaite, research fellow in economics for the Employment Policies Institute [EPI], testified on the resultant job loss, immense cost, and overall ineffectiveness of these mandates in covering the uninsured.

Skyrocketing healthcare costs put low-skilled Americans out of work.
“Attempting to rely on employers as the primary provider of health coverage is already leading to significant job losses for Americans,” said Garthwaite in his testimony. “Economists at UCLA and Harvard University found that the rising healthcare rates have potentially forced millions of Americans out of the labor force. Even without the presence of a mandate, employers have reacted to rising costs by laying off employees; mandating coverage would only exacerbate this problem.”

“Nominally, these policies require employers to foot the bill for increased coverage. Economic research shows, however, that the burden of these mandates will actually fall on employees through decreased job opportunities and wages,” added Garthwaite.

Mandates bear a high price tag and fail to reach majority of uninsured.
New research released by the EPI, for example, estimates New York’s currently proposed mandate would deliver a $9.2 billion blow to businesses, jeopardize up to100,000 jobs, and still ignore 83% of the uninsured.

“These costs may be justifiable if these mandates significantly reduced the problem of the uninsured. But, research shows that employer mandates—due to their dependence on the workplace as the source of insurance—do little to address this problem,” said Garthwaite,

“Rising healthcare costs have made it prohibitively expensive for many small businesses to either offer or continue to offer coverage. These same higher rates have already contributed to significant job loss throughout the economy,” concluded Garthwaite, “It is critical that states, and Congress, attempt to enact meaningful reforms to our healthcare market that will actually decrease the number of uninsured instead of trying to simply pass the buck to employers.”