Posted on February 8, 2010 21:25
Categories: Legislative and Regulatory Issues
Topics: Health Care Reform | Legislation (National) | Spending
This report published by the Center for American Progress (CAP) on January 8 estimates that national health care reform will slow the growth of medical costs through greater competition in insurance markets, better coordination of care, and reductions of administrative expenses. The authors conclude that this reduction in cost-growth would generate an additional 250,000 to 500,000 jobs annually through 2019.
From the report:
Rising health care costs affect employment in two basic ways. On the employer side, employer-paid health premiums are a cost of business, just as wages and salaries are. Reducing the growth of health insurance premiums would therefore enable employers to hire more workers, according to economic theory, holding wages and other benefits constant. On the worker side, most workers are willing to give up wage and salary payments in order to receive employer-paid health insurance. When health insurance premiums rise, therefore, workers who value health insurance as part of the job are often willing to accept lower wages in exchange for the higher benefits.3 Conversely, when costs fall, a large part of the impact will be on higher wage and salary payments. A major effect of health care reform that lowers employer premium growth will therefore be to raise middle-class wages.
Full report: New Jobs Through Better Health Care (PDF | 394.99 KB)
Center for American Progress. (2010). New jobs through better health care. Cutler, David and Sood, Neeraj.
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