Healthcare Professors: Employees will bear the ultimate cost of ObamaCare

This is Jonathan Kolstad, Mark Pauly and Robert Town, Professors of Healthcare Management at the Wharton School of the University of Pennsylvania writing at Forbes: 

[T]he great bulk of the cost of newly offered coverage will come, not out of profits or hiring, but out of worker cash wages. That is what happened in Massachusetts when “RomneyCare” was implemented. While there was little impact on the overall labor market, there was a striking change for those workers who gained new insurance: they saw wage reductions (relative to the trend) of almost precisely the cost of health insurance to their employers. Adding further evidence for the power of the employer side of the labor market to adjust in the face of an individual as well as an employer mandate, the number of employers offering health insurance actually increased following reform. ... 

When the dust clears, employers will be making the same profits as they did before and workers will still have the same kinds of jobs as they did before—but jobs that pay less in cash and more in benefits. So, even though an employer would correctly estimate that his business would suffer if he alone were forced to pay for benefits, the fact that his labor market competitors are being put under the same obligation means that the labor market overall will readjust in a way that is much less threatening. ...

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