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Study: Employer-Mandated Health Coverage Ineffective

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Feb. 26, 2007 -- A national mandate requiring employers to provide health-care coverage for employees would cause nearly a million job cuts nationwide, according to a study released Monday by the Employment Policies Institute, a Washington-based public policy research group.

While forcing employers to offer health insurance could boost the number of nation's insured by as much as 8.2 million, it would also result in 995,000 lost jobs and 1.6 million employees shifted from full to part-time employment, the study said.  
 
By contrast, expanding Medicaid would increase employment by $16.5 billion in aggregate wages, while extending health-care coverage to more than 5 million people, the study said.

Offering tax credits to entice employees to buy their own coverage -- an approach favored by President Bush -- was among the least effective options, resulting in only 1.6 million newly insured people at a cost of $19.8 billion in public funds, the study said.
 
"The sizable job losses and hour reductions that accompany employer mandates should give legislator pause," Jill Jenkins, the group's chief economist, said in a statement. "Rather than arguing about who should pay for insurance, policymakers should start arguing about how to lower the cost of healthcare."

Rising health-care costs consistently ranks high among the concerns of small-business owners, according to the National Federation of Independent Business, a Washington-based advocacy group.

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