Will the Senate Health Care Bill Give Some Employers a Free Ride?

For Immediate Release

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Dan Beeton, (202) 239-1460

Will the Senate Health Care Bill Give Some Employers a Free Ride?

WASHINGTON - As the debate in the Senate over health care intensifies, a new
analysis from the Center for Economic and Policy Research (CEPR)
cautions that the Senate bill lacks an effective
employer-responsibility provision.

"While the House bill ensures that the costs of health care coverage
are shared by individuals, businesses and the public sector, the Senate
bill creates an incentive for some large employers to shift a portion
of their fair share of costs to the public sector, their employees, and
other, more responsible employers," said Shawn Fremstad, author of the
analysis and Director of the Bridging the Gaps Program at CEPR.

The analysis "Free Ride: The Senate Health Bill's Approach to 'Employer Responsibility' Means Some Large Employers Get to Take It Easy,"
examines employer responsibility for employee health care coverage in
the Senate health care bill. The paper shows that the Senate health
care bill creates an incentive for some employers to shift workers from
full-time to part-time status in order to avoid responsibility for
providing health care coverage to their employees. In addition,
low-wage employers who provide coverage that is unaffordable for some
of their employees will have an incentive to maximize the number of
their employees who are eligible for Medicaid.

Leaders in both the House and Senate support the idea of "shared
responsibility" as a basic principle of health care reform. Though
lawmakers in the House have held firm to this principle, those in the
Senate are on the verge of creating a free-rider dilemma that betrays
this commitment.

The full analysis can be found here.

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The Center for Economic and Policy Research (CEPR) was established in 1999 to promote democratic debate on the most important economic and social issues that affect people's lives. In order for citizens to effectively exercise their voices in a democracy, they should be informed about the problems and choices that they face. CEPR is committed to presenting issues in an accurate and understandable manner, so that the public is better prepared to choose among the various policy options.

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