In a sign of how big the Obamacare hit could be, a new review of the similar Massachusetts health care plan instituted by former Gov. Mitt Romney in 2006 found that it cost employees $6,058 in wages annually. But the mandate succeeded to get people health insurance and didn’t result in any major job cuts, said the report, which predicted a similar high costs for Obamacare when it goes into effect next year.
The bottom line: New workers getting health insurance through their job “were willing to accept lower wages in exchange because they valued the benefit,” said the report from Jonathan Kolstad, of the Wharton School at the University of Pennsylvania, and Amanda Kowalski, a Brookings Institution fellow and Yale University faculty member.
Co-author Kolstad told Washington Secrets that there was no cost impact to workers already receiving health insurance prior to Romneycare, a fact that should settle the nerves of millions of Americans worried about the impact of Obamacare.
New workers, however, got hit, with their wages getting cut to match the price of health insurance. “It only applied to the newly insured, who basically were willing to take lower wages in exchange for the new benefit.,” he said.
And in being willing to trade an average of $6,058 annually wages for health insurance, the authors found, employers didn’t cut jobs.
Kowalski suggested that Obamacare would get a similar response, even though critics argue that small employers will either kill insurance and pay a fine or slash employees to cover the new costs. Health reform, said Kowalski, “will likely not cause large job losses but it will likely result in lower wages to workers as employers pass the cost of the mandate onto their employees.”
