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Wednesday, October 31, 2012


Obamacare and Job Growth

This election will have a major impact on what the future of Healthcare in the United States will look like. If President Obama is re-elected he will most likely carry out the plans to enact the controversial issue we refer to as "Obamacare." If challenger Mitt Romney wins the presidency he is likely to either reform or attempt to repeal it. Of course all of this will take the cooperation of the senate and house to decide what is best for the country and/or their given state.

What does Obamacare really incentivize however? Occording to David Gamage in the Wall Street Journal "ObamaCare's Cost to the Working Class" it will do harm to middle income families and what type of insurance they can afford. Gamage seems to have done a fair amount of research on the subject and explains "a worker supporting a family of four deciding between a job paying $54,000 a year without health insurance and a job paying $72,000 a year with insurance would lose only about $7,000 in annual subsidies by accepting the higher-paying job. And a single employee deciding between those two jobs wouldn't lose any subsidies by accepting the higher-paying job" (Gamage 1). This shows us that people that have to support more people in a family are going to have to spend more to support not only themselves, but the single people that will be accepting the free healthcare.

This may also incentivize employers to hire employees on as part time employees so that there is no need for them to provide any healthcare to the employee and they will have to cover it themselves. Another piece of blowback that may be unforseen is the incentive for people not to get married or in some cases to get divorced to save money on not having to buy health insurace and have employers provide it. People respond to incentives, and when the incentive is to save money and choose a cheaper health provider we will see interesting things with marriage rates.


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