I know that is from 1994, but it is by Jonathan Gruber (pdf) and the point is an important one:
I consider the labor-market effects of mandates which raise the costs of employing a demographically identifiable group. The efficiency of these policies will be largely dependent on the extent to which their costs are shifted to group-specific wages. I study several state and federal mandates which stipulated that childbirth be covered comprehensively in health insurance plans, raising the relative cost of insuring women of childbearing age. I find substantial shifting of the costs of these mandates to the wages of the targeted group. Correspondingly, I find little effect on total labor input for that group.
This has become more relevant in light of a recent story out of California, excerpt:
The ability of the exchange to lower healthcare costs remains unclear. Experts said average premiums could rise in the exchange because the Affordable Care Act requires improved benefits, but consumers’ out-of-pocket medical costs could decrease under those same changes.
California insurance officials have expressed concern about substantial rate hikes for some existing policyholders going into the exchange.
Under a new rating map approved by state lawmakers, the Department of lnsurance estimated that premiums for similar coverage could increase as much as 25% in West Los Angeles, 22% in the Sacramento area and nearly 13% in Orange County.
I believe some of that is from a pooling effect and some from a greater coverage effect. I do not, by the way, find this reassuring:
Janice Rocco, the state’s deputy insurance commissioner for health policy, said her agency is pushing a new rating map that would cap increases at 8%. That proposal could be considered during a special legislative session in the coming months.
“We want to minimize the rate spikes,” she said.
I’ve said it before and I’ll say it again: the mandate as currently constituted probably won’t work. The Medicaid extension can, in principle, work, and yet the state-level rebellion against it does not seem to be fading away.