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Obamacare’s Impact on Labor Markets: Limits on the Predictive Value of Romneycare
There has been great debate about the potential labor market impact of the Affordable Care Act (“ACA” or “Obamacare”). Some have pointed to Massachusetts as the harbinger of what is to come nationally,1 while others have predicted massive dumping of employer-based insurance.2 An extension of this labor market debate was on full display during the summer of 2012.3 Critics seized on a McKinsey & Co. survey that found that Obamacare could result in thirty percent
quickly and continually referred to the experience of companies in Massachusetts as a way to push back on this narrative.Surprisingly, there is bipartisan agreement that Massachusetts’s own health reform efforts (“Romneycare”) does in fact serve as an accurate model for what to expect under the federal law: this has complicated a lucid discussion of the ACA’s potential labor market impact.6 The parties just happen to draw opposite conclusions. For Republicans, the state with the nation’s highest premiums embodies many of the worst elements of what happens when government gets even more involved in healthcare.7 For Democrats, the state experiment that expanded coverage is worthy of national emulation.8 This Article argues that Massachusetts holds very limited lessons for the expected labor market impacts under the ACA. Unfortunately, both parties have arrived at an incorrect assessment of the lessons to be learned from Massachusetts because of politics, oversimplified talking points, the lack of a nuanced understanding of the two laws, and a failure to comprehend the Commonwealth’s unique characteristics that have shaped employer and employee behavior.
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