Another unilateral change to Obamacare
Obama already pushed back the employer mandate to 2015 from 2014, conveniently after the mid-term elections. Now his administration is pushing back the mandate for businesses with 50-99 employees to 2016. For companies with over 99 employees, they must cover 70% of employees by 2015 vs. 95%.
This is now the 18th executive branch unilateral change to the Obamacare. Safe to say that at this point, the LAW now says whatever Obama wants it to say on any given day. So much for our Constitutional Republic form of government! Changing a statutory mandate requires the approval of Congress, yet Congress hasn’t done much to stop these dictatorial edicts.
We were told that ACA was going to solve a myriad of problems and that once we got it, those of us who were opposed, would understand the veritable utopia it created. If that’s the case, why keep delaying implementation? If this thing is so great, why wait at all? What is it that is going to happen in a year that will then make this legislation a net positive whereas apparently today even the White House thinks it is a net negative?
Let’s take a step back and look at the big picture. The administration claimed that the ACA would lower healthcare costs for the vast majority and would provide “affordable” insurance for significant portions of the population that were previously not covered, with the assumption that those without insurance were in need or desired it.
So where are we now? So far costs are going up and we have a net loss of coverage as more people have lost the coverage they had pre-ACA than are gaining coverage without having any previously. This is not at all surprising and some simple economics tells us that it’s likely to get worse. ACA increases the demand/use of healthcare while at the same time doing nothing to increase the supply, and in many instances actually reducing the supply of healthcare. How can the price not go up?
Now we’ve gotten an even more troubling dynamic going on with more artificially created warfare between various parts of society. The administration has been doing a bang-up job creating an irrational and self-destructive war between different income and wealth levels, now they are fostering a war between individuals and businesses, creating a lovely trap that the Republicans seem all too eager to fall into.
We’ve now got the Republicans ranting and raving about how it is unfair for businesses to get a break when “hard working families” aren’t. I suppose that makes for a compassionate sound bite, but talk about losing the forest for the trees. Healthcare isn’t a war between businesses and families. Hell, the two shouldn’t even be in the same sentence. Why is health care even remotely related to employment? I don’t get my car insurance or my home owner’s insurance through my employer. Why is my health insurance employment related?
Employers didn’t start offering health benefits roughly 60 years ago because they were experts in medical decisions. It was a way of circumventing the World War II wage and price controls. Barred from offering higher salaries to attract workers, employers offered health insurance instead. Aided by an IRS ruling that said workers who received health benefits did not have to pay income taxes on them, and by the fact that employers could write off the cost of the health benefits as a business related expense, this accidental arrangement became the primary way most Americans access health care and is now viewed as just the way it works.
The system worked at first, but a lot has changed in 60 years. Back then, the average soldier returning from World War II took a job with a local company where he would work for decades until he got a gold watch at a big retirement party. Today, lifetime employment is dead. By 42, the average American will change jobs 11 times.
Sixty years ago, most American companies competed only against neighboring companies for lucrative contracts. Today, most businesses are up against foreign companies that don’t foot the bill for their employees’ health-care costs.
Bottom Line: Obamacare cannot reduce the price of healthcare when it increases demand and at best keeps supply flat, at worst decreases it. What the legislation has done masterfully is show how poorly the public sector addresses pricing and availability problems in the private sector. Health insurance and employment should be separate. Individuals should be able to pick whatever type of insurance best suits their preferences and finances. One-size fits all solutions stifle innovation and in the end, satisfy no one.
