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Jobs and the Senate Healthcare Bill

A WebMemo (number 2716) authored by Robert A. Book, Ph.D., senior research fellow in health economics, was published by the Heritage Foundation last week. It explains “how the Senate health bill punishes businesses that hire low-income workers.” Book introduces the issue this way:

“Suppose you wanted to prevent single parents and people from lower-income families from getting a job. How about imposing a $3,000 tax penalty on any employer who hired such a person instead of an equally qualified, equally paid person from a higher-income family? Would that do the trick?

“It would do the trick quite nicely--but since no decent person actually wants to make it hard to escape poverty, it's a really bad idea. But that is exactly what the Senate health care bill does.

“The Senate health bill (H.R. 3590) introduced by Senator Reid (D-NV) contains provisions (Section 1513) that would impose a tax penalty on any company with more than 50 employees that hires someone who qualifies for, and opts to accept, a health insurance premium subsidy--a penalty of $3,000 per employee per year. And the qualifications for that taxpayer subsidy depend on the worker's family size and family income, not just the pay from that employer. A worker with more dependents would be more likely to qualify, and one with a working spouse or other family members would be less likely to qualify--and the IRS would be required to provide this family information to the employer.”

Book says the bill would have “devastating results,” and concludes:

“The net result would be higher unemployment for low- and moderate-income families and higher health insurance costs for their co-workers--the exact opposite of what the bill's proponents claim is their goal.”

He adds an appendix because he says, “Several people who have heard this analysis have quite reasonably found it difficult to believe.” Consequently, he includes the applicable provision of the Senate bill in an appendix in order “to remove any doubt” of “what the bill says.”  Take a few minutes, and read the WebMemo yourself. Then decide if the provision in question has any legitimate purpose.

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