On healthcare and healthcare costs, I try to take a pragmatic approach. I’m for whatever combination of market and government that can deliver the best quality healthcare for the most possible. I am not a pro-market or pro-government ideologue. Obamacare — or to give it its proper name,
Romneycare The Affordable Care Act — is a strange hybrid of market and government. Yet, I worry that it may encapsulate the worst of both worlds. I have listened keenly to criticisms of Obamacare — specifically, the idea that the healthcare mandate creates a subsidy for for-profit health insurers — and I have worried myself that the individual mandate creates the potential for mandates for the purchase of other market goods. Yes, there are incentives to bring down the cost of care, but evidence is so far quite mixed.
One aspect of criticism I have not paid enough attention to is the labour market impact — specifically, the idea that the employer mandate (which compels firms with 50 full-time employees or more to provide healthcare to fulltime workers) will result in a greater number of part-time jobs, and less full-time jobs. The Washington Times reports:
Since January 2009 the country has added a net total of 270,000 full-time jobs, but it has added 1.9 million part-time jobs, according to the House Ways and Means Committee.
The numbers come as Republicans argue that the president’s health care law is pushing businesses to save money and push workers into shorter schedules to avoid the penalties that come from hiring more full-time workers, who under the law will be required to be covered with health care insurance.
Yet correlation is not causation. This effect cannot entirely be the fault of Obamacare. In this depressed economy, there has been a global shift toward part-time work. Obamacare and its employer mandate cannot be forcing employers in Europe or Britain to take on less full-time workers, and more part-time. But perhaps Obamacare is exacerbating an underlying trend. Because the shift at the margin is very pronounced:
If it is really the case that Obamacare is disincentivising full-time work, then hopefully this shift away from full-time work is only a temporary one. Employers scared of the potential for a high-cost mandate at a time of economic upheaval might try to resist Obamacare, shedding full-time workers and hiring part timers to push themselves below the 50-worker threshold. Once Obamacare is up and running — and especially if it really does reduce costs, and if the economy is growing — employers might stop resisting, and begin hiring full-time workers again.
On the other hand, if healthcare costs remain high and rising, and employers remain resistant then the 30-hour threshold could increase in importance, and the growth of part-time work could continue. This raises larger questions. At this point, the 30-hour threshold seems ill-conceived. Why should employers be responsible for the healthcare of a worker that works 30 hours a week, but not one that works 29? In an era where the availability of full-time work is decreasing globally, should the government not try to avoid worsening this phenomenon with arbitrary thresholds? Shouldn’t large firms be responsible for their part-time employees’ healthcare too?