Health care experts call for 'play or pay' requirement

06/16/09 Mitch E. Perry
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As the health care debate heats up in Washington, two new reports arguing that an essential employer health mandate be part of any health care reform plan were released today.

Also a statement signed by more than 330 health care experts and economists was published today echoing President Barack Obama’s call for health care reform happening this year.

MIT Economics professor Jonathan Gruber was one of those signatories. He said that getting rid of the current employer based insurance system, which he argues work well for companies at large firms – but not for small or new businesses, would fundamentally improve the labor market.

Gruber used economics as an argument that the health care system needs to changed now.

Phillip Cryan is the author of a new report published by the Institute for America’s Future and the Economic Policy Institute called “Will a “Pay or Play” Policy For Health Care Cause Job Losses?

Play or Pay refers to having all employers who don’t offer health insurance, pay a payroll tax to help pay for health care coverage for their employees.

Cryan says previous studies that said businesses would incur vastly high costs than what he said advocates for such a system are arguing for now. And he said such a policy will not be adopted in isolation, but with many other components. He said there are five main reasons to expect job growth would increase with a pay or play system.

Another new report issued today from Cal-Berkeley Professors Jacob Hacker and Ken Jacobs is called “How to Structure a Play-or-Pay Requirement on Employers.” Professor Hacker says the play of pay requirement is crucial for financing health care reform.

Hacker said in his proposal the payroll contribution rate would be between 5 percent and 6 percent of payroll. He said other studies range from 4-7 percent. He said that would not be prohibitive for most employers. The statement and the two reports mentioned in this story are accessible at

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