One of the concerns expressed about health reform and the additional financial burden it places on employers – particularly smaller employers – is that it will lead to fewer jobs as bosses cut employees to reduce expense.
Fortunately, thanks to the forethought of Massachusetts’ legislators and then-governor Romney, we have a “lab’ that’s providing real-world information on the cost and impact of health reform.
On the employment issue, it appears there’s no negative effect in Massachusetts. [opens pdf] According to research published by the Robert Wood Johnson Foundation, Massachusetts’ employment data indicates the employment picture post-reform was not negatively affected by that reform;
- “Declines in private-sector employment were consistent across the states–falling 4.4 percentage points in Massachusetts, compared to 4.8 percentage points, on average, in the rest of the nation.
- The employment ratio in medium-sized firms with 50-499 employees fell by 1.9 percentage points, compared to 2.2 percentage points in the rest of the nation.
- Even when accounting for firm size, industry, and job and worker characteristics, the trends in Massachusetts are similar to those in the nation as a whole.”
The study itself was quite robust, delving into worker types, skill levels, age, full time v part time, and education level. Across the board, there did not appear to be any difference in employment trends – after implementation of health reform – between Massachusetts and the four states used as a comparison basis.
There’s another aspect to this issue that bears mention.
Small employers, and sole proprietorships (like my firm) are finding it increasingly difficult to get insurance coverage due to insurance underwriting, pre-ex exclusions, and rating practices. And let’s not get into the application process, which is akin to applying to college and for US citizenship in terms of the information required and length of the process.
At some point these individuals and firms may move to Mass to ensure ongoing access to health insurance. They’ll bring their tax dollars too. I know of one new company forming in Mass specifically to ensure the partners’ families have access to insurance without exclusions.
What does this mean for you?
Unintended consequences can be good, too.
I, too, am a sole proprietorship and find it nearly impossible to get insured in California. I have no choices – I’ve been rejected by every insurer. Only Anthem Blue Cross will carry me because of prior group coverage, but they charge me nearly $1,000 per month and have repeatedly tried to purge me by not processing my payments, then cancelling me. (Twice in 2 years I’ve had to call them with their own “confirmation numbers” which they then claim to not recognize and fax copies of bank statements to prove cleared payments for them to reluctantly reinstate me.) They’ve even told me on the phone – quite rudely – that if dropped, they will never cover me again.
I would gladly move my business to a state like Massachusetts to ensure coverage if I had to.