The weasel in the fine print: Henwood illustrates Obamacare’s (un?)intended consequences
For the past four years in regards to Healthcare and education, I have heard a few of my liberal friends constantly argue that don’t let the perfect be the enemy of the good. Of course, this only applies if one is the enemy of the good, but the provision’s of the Democratic Healthcare reform are transparently not so good. Doug Henwood has had a few posts, one at Jacobin, and the others on his blog, getting into the specifics of why:
Ah, vindication. Today’s Financial Times has has a front-page piece (“US business hits out at ‘Obamacare’ costs”) confirming the central point of the McKinsey survey: for many employers, it will be much cheaper to pay the penalties than cover full-time workers, and cut the hours for others so they fall under the definition of full-time and then don’t have to be covered. Retailers and fast-food chains are the most likely to do that, but there’s no reason that many other employers wouldn’t join in.
David Dillon, CEO of Kroger, put it succinctly: “If you look through the economics of the penalty the companies pay versus the cost to provide coverage, the penalty’s too low, or the cost of coverage is too high.” The penalty for not covering a worker is $2,000 a year — less than half the cost of covering a single worker ($4,664, according to the Kaiser Family Foundation), and less than a fifth the cost of covering a family ($11,429). Uncovered employees will be forced to buy coverage on the new insurance exchanges — with a government subsidy if their income is low enough— or pay the penalty themselves. You don’t need an MBA to figure out the math on that one.
So effectively this may end any affordable healthcare insurance at the low end of the employment spectrum, and the healthcare it will provide at the affordable rate in the private exchanges will actually reduce access to care. We already see this in another post by Henwood:
The contract covering 42,000 Stop & Shop workers in MA, CT and RI expired last night with no agreement. The problem is the company’s Obamacare-prompted proposal to eliminate medical insurance and prescription coverage for part-timers. Because caps on coverage aren’t allowed under Obamacare and the current plan for PTers has a $20K cap, they say the cost of coverage for part-timers will increase to the same cost as for full-timers when this part of the law goes into effect.
So given that these will be forced on cooperatives that for whose do receive subsidies (up to 400% of the federal poverty line at around 80K a year), but no minimum pricing beyond those subsidies effectively does make argument from the likes of the Heritage Foundation that this is a handout from one sector of the economy to another. They should know, it was originally their idea. Given that there are few if little cost controls on the insurance companies or the hospitals, and the onus of keeping things affordable rely on almost solely on either the employer mandated 60% pay-in per employee or the healthcare exchanges, you can expect that at continued rates of growth of both employers and employees would could more easily afford the burden of the penalty for not carrying the insurance than buying it even in the exchanges. Conservative press has already talked about the “sticker shock” of the premiums under Obamacare. Healthcare inflation may have slowed, but no nearly enough.
In some ways this will make things look as if reforming healthcare was not a good idea, although the US would be effectively the only country who has decided to this completely by regulation and imposition of a market that has almost no direct socialized competent, and will thus make further attempts at reform more difficult due to its unintended consequences in the US despite the fact that almost all this was sole too us as steps are often marketed by progressives as a “beginning.”
This in some sense makes me wonder: given the origin of many of the provisions in this legislation, are all these consequences so unintended? So are the Democrats here being useful idiots, or is there something far more nefarious going on?