Yesterday's intelligent rant from John Green reminded me of a worry I've heard voiced a number of times recently, namely, that the Affordable Care Act will cost jobs by requiring most larger businesses -- those with 50+ employees -- to insure their workers or else pay higher taxes.
The fear is that companies will try to avoid the expense by making most of their workers part-timers, since they won't have to buy health insurance for them.
But here's what the people saying this tend to leave out: Of the large companies affected by the new rule, 96 percent already provide health insurance for their workers anyway.
For the rest, the hassle and expense of replacing a 40-hour worker with two 20-hours workers is likely to convince most of them to just go ahead and buy insurance, even if it forces them to compete on a more level playing field. But do we have any hard evidence that's true?
Yes: Hawaii. For four decades that state has made almost all businesses (even small ones) insure all employees working over 20 hours a week. A handful of (mainly tiny) businesses do indeed use part-timers to cut their insurance costs, but the vast majority do not. Consequently, Hawaii comes closer to universal coverage than any state except Massachusetts -- which has the system Obamacare is modeled on. And at least partly as a result, Hawaii has nearly the lowest health insurance costs in the U.S. and some of the nation's best healthcare as measured by such things as life expectancy, breast cancer survival rates, and so on.
Here's a nice report on Hawaii's insurance system from The Daily Show in 2010. (The clip starts with a funny bit on Republican worries of a "trap" if they meet publicly with Obama, and then gets to Hawaiian health insurance.)
Note, incidentally, the bit about what happens to Hawaiians who lose their jobs: They get free health insurance while they're looking for work. Many Republicans will tell you this will surely be a disaster, and yet it has worked, affordably and well, for 40 years.
But hey, what about rumors that businesses are already hiring fewer workers because of the insurance requirement? That's a little hard to believe, since the rule isn't in effect yet and enforcement was recently postponed until 2015. The old advice still holds true: Don't believe everything you hear.
OK, so almost all big businesses already insure their workers and the 4% that will most likely do so as well. But won't that mean the those in the 4% will have to raise prices? Possibly so, but just how bad is that price increase going to be? Just over a year ago the Obamacare-hating CEO of Papa John's Pizza told investors that Obamacare was going to make them up the average price of a pizza by a horrific 11 to 14 cents. Here's Stephen Colbert's hilariously sarcastic reaction: