Unhealthy claims

The Democratic health care program that Congress passed and President Obama signed has been accused of authorizing everything from snuffing grandma to federal monitoring of our gold coins (that last one came from a columnist at the Las Vegas Review-Journal).

“Job killing” is one of the most potent of those claims. The Nevada Restaurant Association has used it. So have U.S. Reps. Joe Heck and Dean Heller of Nevada. Republicans in the House introduced legislation that had the claim in its title—the “Repealing the Job Destroying Health Care Law Act,” which failed to pass. A Las Vegas insurance salesman named Dan Heffley even quantified it—Nevada, he told a columnist, would lose 8,500 jobs. Many of those who made the claim—if they substantiated it—cited a report by the National Federation of Independent Business.

By contrast, U.S. Sen. Harry Reid said during his 2010 campaign, “And it creates jobs—thousands and thousands of jobs.”

As usual in these superheated disputes, journalism was no help in sorting out the issues, but now some think tanks are reporting on some claims. It’s too late to be of help, but it’s still illuminating. The Urban Institute in Washington, D.C., released a report on the one-year anniversary of enactment of the law. It reports:

“On balance, taking premiums and assessments into account, small businesses would save 8.7 percent compared with their current premium contributions. … The savings of 8.7 percent for small firms means that if anything, they would have lower costs of labor and should be more willing to expand employment. Moreover, it would become more attractive to start a small firm, given access to health insurance and ability to purchase health insurance through an exchange, as well as the opportunity for some to obtain employer subsidies. The incentives for entrepreneurship should increase, not decrease. This is particularly true for those wishing to move from employment in firms to self-employment. …

“For firms of 100 or more, coverage expands slightly—about 0.7 percent for medium-size firms and 2.2 percent for large firms. Moreover … medium-size and large firms pay $15.6 billion in assessments. Firms that do not offer coverage to their workers and choose instead to pay the assessment if some obtain subsidized exchange coverage would face somewhat increased labor costs and therefore have lower labor demand. … However, the total amount in assessments is very small in comparison to wages and salaries in the United States (0.2 percent of the $6.4 trillion wage base) so any negative impact on jobs must also be small.”

In addition, some jobs “lost” do not “represent jobs lost as a result of [the new law], but decisions made by those no longer locked into employment situations as a consequence of their need for health insurance.”

And what about that National Federation of Independent Business study? The Urban Institute found that it was written before the law was written, so it was based on assumptions that did not pan out. But even when using the NFIB study assumptions, “the NFIB estimates in light of the legislation actually passed would indicate relatively little net job loss.” And in one section of the report that was seldom quoted by critics of the law, the NFIB “estimated that more than 800,000 jobs would be gained in the health care sector as a result of the coverage expansions” (emphasis added).