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Pay-or-Play Health Insurance Mandates: Lessons from California

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Publication Date: October 2006

Publisher(s): Public Policy Institute of California

Author(s): Aaron S. Yelowitz

Funder(s): Public Policy Institute of California

Funder(s): Public Policy Institute of California

Series: California Economic Policy v.2 no.3

Topic: Health (Health care financing)

Type: Report

Coverage: California


In 2003, Sacramento enacted one of the first "pay or play" laws, mandating that employers either provide health insurance to California workers or pay a fee. Although the law was never implemented, the pay or play idea has since caught the attention of many other states’ legislatures. In this issue of CEP, the author examines the probable outcomes of California’s version of pay or play and concludes that it was seriously flawed: Employment and wages would have stagnated as employers passed on their increased costs, and many in the population would have remained uninsured.