Play-or-Pay Provisions in Health Care Bills Must be Balanced with Making Coverage Affordable for All Americans
For Immediate Release: September 18, 2009
Contact: Alan Barber, (202) 293-5380 x115
Washington, D.C.- As Congress considers the pros and cons of health care reform proposals, a new report from the Center for Economic and Policy Research (CEPR) reviews the employer responsibility requirements—often referred to as “play-or-pay” provisions—and makes recommendations on how to best structure such a requirement to ensure that low-paid workers are not negatively impacted by them. It concludes that health insurance generally would be less affordable for many working- and middle-class families—as well as less universal—under the Baucus proposal than under the House or Senate HELP proposals.
While all of the leading health care reform proposals require individuals to obtain health care coverage, the report, “Employer Responsibility in Health Care Reform: Potential Effects on Low- and Moderate-Income Workers,” explains that they differ in how they would require employers to share in the costs of coverage for their employees. It also finds that while the size of the Baucus play-or-pay provision is considerably smaller in economic terms than the House or Senate HELP provisions, it has significant drawbacks in terms of efficiency and equity. The report determines that the Baucus provision is considerably less efficient than the other two provisions because it would be much more costly to administer per dollar of revenue realized.
In addition, the report notes that minimizing employer costs needs to be weighed against other more important health-reform goals, including ensuring that coverage is both universal and affordable, and concludes that the Baucus bill taken as a whole would impose relatively greater costs on working- and middle-class families, and cover several million fewer Americans, than the other proposals.
The full report can be found here.