Our expert answers 3 Questions
Like a lot of people, I am spending a lot of time thinking about the implementation of the Affordable Care Act. In particular, I am wondering what effect it will have on employer-sponsored health insurance. Some people say that this is the beginning of the end for employer-sponsored coverage - that all employers are going to put their workers into the new health insurance exchanges. I tend to think that this will happen only for the workers who may really be better off getting their insurance at a place other than work, like part-time workers and workers at small firms.
I think the important thing for the provision of care is that people have coverage, regardless of whether it is from an employer or an exchange. But the source of coverage does matter for other reasons. It affects who gets tax subsidies, for one thing; higher-income people get them if they have employer-sponsored coverage while lower-income people get them through the exchange. It might also be better for labor markets if you could choose your job without having to worry about whether or not it provides insurance, but we don’t know how big this effect will be.
Two reasons. One is that it puts economic models to the test. We think we understand why employers provide health insurance, but do we really? The other is that it has been such a sensitive issue politically since even before the health reform law was passed. We have had the president saying “If you like the coverage you have, you can keep it” at the same time that others were prophesying doom. So which is it going to be? Now we get to find out.