How Obamacare Will Hurt Poor Women & Children Most


Posted by Tim Andrews on Monday, March 8th, 2010, 3:28 PM PERMALINK

It is a strange day when we at ATR start quoting Ezra Klein approvingly. But, here goes. Late last year, Mr. Klein wrote in the Washington Post that the Senate Healthcare Bill would hurt women and children the most:

[This Bill] ;penalizes employers for hiringlow-income workers who are eligible for subsidies. That will create an incentive to do one of two things: Don't hire low-income workers (hire a teenager looking for a job rather than a single mother, or hire a housewife looking for a second job rather than an unemployed breadwinner), or hire illegal immigrants.And it actually gets worse...it not only discriminates against low-income workers, but itparticularly discriminates against low-income parents. Single mothers will get the worst deal, as they have lower incomes, and as you might expect, children who need health care.
This provision passed in the Senate Bill. So what exactly is it all about? Steve Horwitz, writing in Co-ordination Problem, provides the following handy summary:

A provision in the legislation penalizes firms who don't provide a level of insurance coverage comparable to the government-set "minimum essential coverage" IF at least one of their employees must use government subsidies to be able to afford the employer-provided coverage. In other words, if tax dollars are paying for the insurance of even one employee and the firm doesn't provide the minimum coverage, it will face substantial financial penalties.

The idea, of course, is to force firms to provide the minimum coverage. But, alas, the more likely response by firms is to not hire employees who are likely to need subsidies to cover their costs because that will mean the firm has to spend more on providing insurance to employees. Who are those employees likely to be? Lower-income folks and especially those who need more expensive family policies. In fact, the penalties are higher if the subsidized worker has a family. A prediction would be that more single moms will find themselves out of work; Once again, government intervention produces not only results the opposite of its intentions, but harms the most vulnerable in the process.

So that's Obamacare for you. Hurting everyone, but low income women with kids the most.

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