The worst policy idea in the world gets a bit better but still isn't good enough
Harry Reid's bill has made a number of complicated changes to the free-rider provision, a.k.a. The Worst Policy Idea in the World. The Center for Budget and Policy Priorities says these tweaks make the free rider a bit better, although others disagree with that analysis, and the whole thing is so bizarrely complex that I'm not sure anyone can confidently predict how employers will react to it. Full story here.
But the real answer to this policy isn't to tweak it. It's to replace it with the House's straightforward employer mandate. The Center for Budget and Policy Priorities is too polite to say that that's what they're saying here, but that's what they're saying here, and they're right:
The new provision is very different from the House bill’s employer requirements, under which firms that elect not to provide health coverage would pay a flat percentage of their payroll (2 percent of the payroll of non-covered employees for firms with payrolls between $500,000 and $585,000, 4 percent of payroll for firms with payrolls of $585,000 to $670,000, 6 percent of payroll for firms with payrolls of $670,000 to $750,000, and 8 percent of payroll for firms with payrolls larger than $750,000). The House provisions would not create incentives for firms either to try to minimize the hiring of workers from lower-income families or to convert full-time positions into jobs of less than 30 hours per week.
The employer requirements in the House-passed bill would raise $135 billion over ten years, according to the Congressional Budget Office. The Senate provision would raise $28 billion, about one-fifth that amount.
There will need to be vigorous discussion of these issues in conference, where there should be opportunity to make changes in the Senate bill’s employer-requirement provision.
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