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A new study has identified yet another problem with state and federal laws requiring people to carry health insurance. Not only do such mandates encroach on our basic liberties while failing to achieve their ostensible goal of providing for universal coverage, they increase unemployment:
Laws that require employers to provide health insurance to employees will cause one in 10 of those workers to lose their jobs, according to a report on health-care reform.
Like arbitrary increases in the minimum wage, health insurance mandates increase costs for small businesses. These small businesses are then forced to cut costs anywhere they can:
The cost of providing health insurance is so great that most businesses covered by ‘pay or play’ laws will be forced to cut back on hours and jobs just to stay afloat.
And, as usual, it is low-income workers who will be hurt the most by government meddling in the market:
The “working poor” earn too much to qualify for and benefit from proposed laws that would mandate employer-sponsored coverage. Many other low-wage workers would get no benefit because they would no longer have a job.
I’ve said it before, but it bears repeating: mandates don’t have magical powers. If the market distortions that lie at the heart of the uninsured problem aren’t addressed, arbitrary government decrees will only produce more market distortions.
+ May 2007
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