David R. Henderson  

The Twenty-Niners

PRINT
Tyler Cowen on NGDP targeting... The Fall 2016 Public Choice Ce...

"We're Hiring Economics Writers," says the headline of a post at the web site FiveThirtyEight.

Good for them.

Then they write:

This is a part-time staff position (up to 29 hours per week) and does not offer benefits.

Any idea why they chose 29 hours?

Answer: Obamacare.

Here's how a video at Prager University puts it:

This is Kelly. She's a hard-working, independent college student. To pay for school, she works between 35 and 39 hours a week at her local grocery store.

But today's been rough for Kelly. She has just been told that she's now part of a new group of Americans: the "29ers"...

Starting in 2015, the Affordable Care Act requires many companies to offer health insurance to employees who work 30 hours or more a week. As you may have guessed, the grocery store Kelly works for is one of these companies.


HT2 Tyler Cowen.


Comments and Sharing






COMMENTS (9 to date)
MikeP writes:

Any idea why they chose 29 hours?

Oooh. Let me try.

Market failure?

Neoliberalism?

It's neoliberalism, isn't it. Markets well managed by government programs, such as the health insurance market, cannot fail.

ThaomasH writes:

One of the big failings of ACA was that it kept the link between health insurance and employment as the way of channeling tax subsidies to the purchase of health insurance. Incremental changes are the enemy of better solutions, but policies are never fixed and can be reformed.

MikeP writes:

One of the big failings of ACA was that it kept the link between health insurance and employment as the way of channeling tax subsidies to the purchase of health insurance.

For "kept", read "mandated".

For "channeling tax subsidies to", read "obscuring the now even greater cost of".

Khodge writes:

No, I don't think those explanations work. The government has made it clear that they are only interested in making businesses more successful while helping average working people move into the middle class.

Benjamin Cole writes:

Sheesh,

Let's admit defeat on this one, and go to single-payer universal care. It works better.

Hold costs to 12% of GDP and also hold your nose.

The free-market solution of a lot of pain for some, and euthanasia for old people is an option too.

Kevin Lacker writes:

This isn't new. When I got a job at the Gap in Boston in 2002, I was also restricted to 29 hours a week. I'm pretty sure there was some sort of benefit that kicked in at 30 hours a week, even back then.

ZC writes:

@Kevin Lacker
It is new...on a national level. Whatever your employer in Boston did in 2002 was because of their own policies or those of the city or state, not because of a new national law which often makes it prohibitively costly for employers of low marginal product/easily replaceable employees to have them work full time. See the difference?

ThaomasH writes:

@MikeP

But do you agree that the policy of linking health insurance purchase for most people, whether through favorable tax treatment or by mandate, was a mistake? I think it is both because it obscures the cost and because the tax favoritism was and remains unfair. I think the subsidy should go directly to the person as a partial tax credit.

What's the evidence that ACA has increased the cost of health care?

All that said, I do not think there was a feasible alternative way of expanding health insurance coverage in 2008. The fact that Congressional Republicans have not settled on an alternative to ACA confirms this, in my view.

MikeP writes:

But do you agree that the policy of linking health insurance purchase for most people, whether through favorable tax treatment or by mandate, was a mistake?

Absolutely and completely. The implicit and explicit binding of insurance to employer is the single worst policy error in health insurance today.

The ACA doubled down on that policy. Hence the problem reported in this post.

What's the evidence that ACA has increased the cost of health care?

For the same coverage, employer-provided insurance today is significantly more expensive than it was before ACA.

But, as a whole, ACA may have actually tempered the rise in the cost of health care in toto, primarily because the punishing increases in cost of employer-provided insurance has pushed employers and employees toward lesser coverage -- i.e., toward coverage that is more like insurance and less like prepaid unlimited health care and therefore exposes higher costs and deductibles to the consumer.

All that said, I do not think there was a feasible alternative way of expanding health insurance coverage in 2008.

They could have developed the marketplace and the subsidies to increase the number of those covered without adding mandates for employers to provide insurance and mandates that added minimum requirements to insurance coverage.

Regardless, health insurance is not health care is not health. Expanding the first does not necessarily improve the last, and there are precious few maladies that are less expensive to address through health insurance than when provided to those without insurance on an acute care basis as was done before ACA.

Comments for this entry have been closed
Return to top