The PPACA Sky is Falling . . .
Quelle Surprise, The White House Administration has decided to give “some” companies with >50 employees a one year extension in order to prepare and comply with the PPACA mandate. Given the amount of resistance the PPACA has received from the states in preparing for it and the House of Representatives, this delay should come as no surprise at all. While everyone has rushed into the fray claiming it is proof the PPACA is failing, the delay impacts a fraction of the employers with >50 employees. 94 – 96% of the ~200,000 employers who fall into this qualification already offer comprehensive healthcare insurance. The delay was to allow the 4 to 6% of the employers (8,000 to 12,000 employers) time to decide what they will offer. Former health policy administrator Ezekiel Emanual had this to say as reported by Bloomberg Health-Law Employer Mandate Delayed by U.S. Until 2015:
“Former White House health policy adviser Ezekiel Emanuel, now vice provost at the University of Pennsylvania, said today on MSNBC’s Morning Joe that the delay of implementation of the employer mandate will impact a limited number of companies. ‘I actually don’t think this is that big a deal,’ he said.
‘The provision only applies to employers who have 50 or more employees’, Emanuel said. He estimated that there are 200,000 total employers in the U.S. impacted and that “94 percent already offer health insurance” to employees.
‘We need to look for 2020 rather than moment to moment for changes in the system,’ Emanuel said.
Obama has confronted opposition from Republicans at every turn of the law, which passed Congress with only Democratic votes and was later challenged before the U.S. Supreme Court.
Only 16 states have agreed to set up the new exchanges, or marketplaces to sell insurance to people who don’t get it at work. Twenty-four states have refused to expand Medicaid, as called for under the law, according to Kathleen Sebelius, Obama’s secretary of health and human services.
Congressional Republicans, who have vowed to try to repeal the law, have refused Obama’s requests for about $1 billion more to help enact the statute and ensure it runs smoothly. Instead, they’ve started multiple investigations into the implementation.
Nor is this the first time Obama has been forced to scale back the law’s features. In March, the administration said small businesses wouldn’t be able to give their workers a choice of health plans in exchanges set up just for them. In January, a plan to create new nonprofit insurers in states was curtailed after Congress capped funding for the companies.”
Reports of companies limiting workers to 30 hours per week to avoid offering them healthcare insurance has been in the news with food chains and WalMart leading the way. It does not quite work that way as reported by Maggie Mahar at Health Beat Blog; The Employer Mandate is Postponed: What Does This Mean For Obamacare? Is Ezra Klein Right–Should the Employer Mandate Be Repealed?. Maggie goes on to say:
As I explained in a recent post, what the critics don’t seem to understand is that the ACA requires that employers offer health benefits if they have “30-time full-time employees or full-time equivalents.” Two workers who put in 15 hours a week equal one full-time equivalent. In other words, the government doesn’t count heads, it counts hours. To figure out how many “full-time employees and full-time equivalents” a business owner has, the government will add up the hours that all of his employees work, and then divide by 30.
The employer who cuts 12 of his 40 full-time employees to part time, and hires another 12 part-time employees to fill in the holes in his work schedule will wind up with 28 full-time workers and twelve “full-time equivalents.”
He will not have to insure the part-time workers, but he will be required to offer benefits to the 28 who actually work 30 hours a week.
As far as WalMart, people are already complaining about the lack of stocked shelving and service. This plays into the hands of WalMart competitors such as Target and Costco who appear to have their employees well being in mind. Should the Employer Mandate be removed. Some interesting commentary from Maggie Mahar. In 2009, Ezra Klein argued against the employer mandate and recently the same argument surfaced again.
“Again he quotes CBPP: ‘The employer mandate and penalties ‘would likely influence employer decisions about which of their employees to let go when they trim their workforces to cut costs, such as during a recession’ Workers from low-income families would cost the firm significantly more.’
Yesterday Klein repeated the argument, writing that ‘Eliminating” the employer mandate, or at least utterly overhauling it is probably the right thing to do.’
Maggie: I disagree. I admire both Klein’s Wonkblog and the CBPP, and applaud most of what each have written about health care reform. But in this case the argument is based on the false assumption that employers will choose to pay a penalty of $2,000 to $3,000 per employee rather than provide insurance. What both Klein and CBPP overlook is what Klein himself has explained in the past:
‘People simply misunderstand why employers offer health-care benefits. They’re not doing it as a favor to employees. . . Employers offer health insurance because employees demand it. If you’re an employer who doesn’t offer insurance and your competitors do, you’ll lose out on the most talented workers. An employer who stopped offering health benefits would see his best employees immediately start looking for other jobs.’
Research also shows the health benefits improve productivity and reduce absenteeism. As I pointed out: not long ago:: “This explains why 95% of employers with more than 30 workers offer insurance.”
The sky has a long way to fall before it hits your head. Do not be fooled by the commentary lacking substance. The habitual naysayers and pols are having a field day with this revision in implementation when the problem is only a small portion of the total. Most employers are ready to go forward.
Ah, how sweet.
But really, the Obama administration has been consistently unable to timely publish regulations and put together the administrative structures necessary to operate the programs.
When regulations are published the regs are complex, convoluted messes (see EMR meaningful use for example).
The reporting system for the 50+ employers requires incredible amounts of data from the employers, and huge processing power and complex algorithms on the IRS side. This has a great techie influence, and the results are a mess.
Bad design, poor implementation.
And there is more bad news creeping in, PPACA depends on Accountable Care Organizations (ACOs) to control costs, and so far not much luck. Granted, it is early yet.
STB:
It may be true the amount of data required; but, I have yet to see a commercial insurance plan which did not require the same and neither was it simple. Commercial Healthcare Insurance is certainly not the model of simplicity.
What is sweet about the PPACA is it will morph into something better than what it is today to the extent insurance companies and their ilk who have overcharged people for decades, dropped those in dire need of it, and generally have not done what it was originall intended to do. This is just a start STB and soon enough you will be consulting in another field.
Poor design and implementation? True to the extent it was forced into the mold by those who chose to do nothing to resolve the lack of healthcare for millions. Is it not true commercial healthcare insurance and its sychopants would do nothing to reconcile the issue of healthcare and maintain the cost model which dwelled on profit over quality? As far as costs STB, what has the S&P healthcare indices been showing over the last year? A continued decrease in healthcare costs. Costs will be contolled unless the industry lobbys hard enough with the pols who would sell us out.
If you really want to discuss a topic, lets take on the Michigan Medicaid Expansion and what it means for single and childless married adults who are excluded from Michigan Medicaid plus those adults in families with children who exceed the draconian percentage of FPL acceptable for Michigan Medicaid coverage. These are the people you intend to disenfranchise.
The more the PPACA comes to,failure, the closer we come to Medicare For All.
Jerry:
The failure of the PPACA will cause us to revert back to the same scenario which is no solution at all and would make the insurance industry extremely happy. The solution is not in failure and it is in morphing into Medicare or a universal coverage until 65. The PPACA has many good attributes to it which will make a difference, such as the expanion of Medicaid. While states can reject the expansion of Medicaid, no one is discussing what will hapen to those state resident in states where the present coverage does not exist or is less then 100% FPL. These people will be left with no subsidized healthcare insurance and all because of the state’s resistance to Medicaid expansion.
Medicare for all?? Likely a good idea, but…… Until voters in this country start voting with their brains instead of their bigotry we are not likely to see any improvement in the Congress. Hve you been listening to the idiotic commentary coming from our elected representatives on virtually all issues, especially those issues that are more social than economic. But still all issues seem to bring out the truely limited level of intellect that now occupies the Congress.
Amen to everything save_the_rustbelt says. The reporting requirements on large employers who already offer healthcare to 40-plus hour workers are NOT minor or simple, if they also have other employees such as part-time workers, adjunct faculty, etc. etc.
Hello Tex,
If the US Chamber of Commerce and other of the various business associations had gotten behind Medicare for All they could have freed themselves of all of those onerous record keeping tasks. Funny what problems the business world is willing to accept inorder to avoid supporting worthwhile social programs run by the government. Even when the cost would be less and the administration beneficial to all involved. I guess the idea of workers having a secure medical plan behind them is too much to ask from our brilliant captains of industry and their representatives in the Congress.
Jack, I agree.
The US Chamber of Commerce wanted nothing and nothing to change. Another little factoid, the PPACA is a take off of the Heritage Plan for healthcare. The very same Heritage Think Tank which they tend to throw in our faces when it is convenient.
Since it looks like we won’t be able to level the playing field for all Americans by having Medicare-For-All, then we should at least level the playing field for all Americans by eliminating employer-based health insurance plans, including plans that cover government workers at all levels of government, and plans that cover career politicians, many of which are covered for life!
It’s welfare for the rich as its worst for a multimillionaire plutocrat like Dick Cheney–who, by the way, is a war criminal in the eyes if the Hague — to be handed a million-dollar winning lottery ticket for a heart transplant, that’s paid in full by the the US taxpayers. Dick Cheney has got more than enough money to pay for his own health insurance. In fact, he’s got more than enough money to pay for all of his healthcare, including his million-dollar heart transplant, out of his own personal bank account.
Another advantage to getting rid of employer-based health insurance is that it will enable workers to move and seek employment elsewhere, or make it easier for them to strike out alone on their own as entrepreneurs without having to worry about losing their health insurance. I can’t think of a better way to support entrepreneurship, besides having Medicare-For-all, than to let employer-based health insurance go the way of the dinosaurs!
Cynthia:
Cheney gets lifetime healthcare insurance because he was a vp, evil or not. One documntary suggested gov service for lower level staff is partially compensated by healthacre insurance. For them, life time healthcare coverage comes after many years of service unlike our elected congressional reps.
I would like to see something better than the PPACA; but, this is the best we can achieve for now with the Congress we have in place.
If we were to eliminate employer based healthcare, the people losing their healthcare should have their salaries increased by the cost that the company had been paying for their healthcare. Otherwise, the company will just add it to their profits and/or funnel it to their executives at the expense of their employees. Alternatively, apply a healthcare tax to the company to help pay for their employee insurance.
Jerry:
Lots of detail here with no specific meaning and you are forgetting some things. Healthcare is a big write off for business. I believe 50%(?) can be written off of Gross Profits. ~75% of healthcare is paid by companies and the other portion by employees. Your increase would not be that great. In many cases, healthcare insurance for employees is used to hide cadillac plans for execs. Rather than tax big employers, I would prefer te gov get their taxes from overseas profits and correct the corporate tax code forcing them to pay their fair share as they certainly are not paying 35%. Ever watch “740 Park?” It is a documentary, a good one, and is on Netflix right now. 740 Park is an apartment building in Manhattan which houses the largest collection of welath and income in the nation.
Hear, hear, to run’s response to Save the Rustbelt and also to his response to Jerry.
Rusty, the healthcare insurance system is so uncomplicated now? It works so well now? The private insurance companies are so easy for employers and patients to work with?
Run,
I agree. Those are better sources to fund healthcare.
Let me remind you, Run75441, aka Bill H, assuming you didn’t already know, that one of the many untold number of provisions in Obama’s signature healthcare reform law states that NO US employer can provide healthcare benefits to its top management without also providing these benefits to all of its other employees who work at least 30 hours a week. These benefits must be exactly the same in terms of out-of-pocket expenses and quality of coverage, as well as duration of coverage, for ALL employees, regardless of where they are on the organizational chart. The federal government is also just another US employer. In fact, it’s the largest employers in the US. Therefore, it’s a blatant violation of the law for federal employees like Barrack Obama and federal retirees like Dick Cheney, to get healthcare benefits free of charge and for life without also providing these employment benefits to all other full-time federal employees and retirees.
Apparently,Obama and all of the other federal employees, who played a non-trivial role in making ObamaCare the so-called “law of the land,” are too far up the plutocratic food chain to have this law apply to them! This belief among Obama and other top-tier federal employees that they are somehow above the law, enabling them to say in a very puffed up way, “do as I say, but not as I do,” smacks of tyranny and a plutocratic-welfare state. It’s way passed time for all of these tyrannical parasites to be dropped from the federal payroll, for good!
Hi Cynthia:
I do not disagree with you; however, you must know President Obama did not write the PPACA. Congress wrote the PPACA after much bartering and bantering with little Republican assistance. The last time an Executive Office attempted to write a healthcare bill, it failed miserably in Congress. Hillcare woud have enn 1/5 the cost of the PPACA. You probably also know Congress does exempt itself from many of the same bills which impact us. This is no secret. Congress make and writes the law and we live by it.
as for paying for it, unless you just love politics, i’d phase in a medicare for all plan:
transparent dedicated tax that covers ALL “reasonable” medical care, paid by a capped, flat tax.
the reason for the cap is to keep it from becoming welfare. there is enough “welfare” built into the flat tax to make up the gap between what the poor would pay and what their expected medical costs would be. and that difference would come from the “flat” tax on higher earners that is in excess of what their expected medical costs would be… but not punishingly in excess… just enough so that it could be rationalized as an “insurance on insurance”… that is insurance in case you lose your great job and have to get by like the rest of us.
in the long run that won’t work unless the people decide, as a nation, that the medical care they are getting is worth the cost. when they see people in other countries getting better outcomes for half the cost, they may take steps to control costs.
but playing the politcs, and the complexities, that come from what amounts to a life saver for the insurance industry which would otherwise collapse from its own excesses…. is apparently the new american way. a loving marriage of public and private. the public pays the private profits, a lot.
of course it won’t happen as long as “they” can blame “the gummint” for all the things people don’t like about obamacare… even though “they” are the ones who profit by it.
Boy I love arguing with you, Run. ;~) It’s true that Congress wrote the PPACA, but Obama signed it into law. He must be proud of it, otherwise he wouldn’t proudly refer to it as “ObamaCare.” If the PPACA is really Congress’s baby, and not Obama’s baby, as you suggest, then please tell me, why is it not referred to as”CongressCare”? Come to think of it, “ConCare” would be an appropriate name for it!
The thing is, Run, in my attempts to comprehend Obama and other like-minded government actors, I don’t think it’s enough to imagine them as simple and ruthless calculators. The characteristic that defines them is what we might call cognitive dissonance, and Orwell would have called Double Think. Obama typifies this very well, at once possessing a mind of ruthless realpolitik in the service of power, and yet maintaining a grand delusion of acting for a higher good – a madness that abandons solidarity with the individual, to protect some sublime concept of identity – God and nation.
It is mistake to attribute this to intelligence or foolishness – it is a special cocktail of mind that can arise in anyone, that proves so dangerous.
Obama’s a puppet with strings
A sign of what tyranny brings
His noble disguise
Lends credence to lies
He answers to clandestine Kings
The Limerick King
Cynthia:
It is not really an argument; but, it could be called a discussion.
Why not call it Lieberman Care as he was the Senator from Aetna and the prime instigator in killing Medicare for those 55 and above and Medicare for all. Or maybe, we could call it the Snowe-Liberman Care as they both opposed the public option. The same as Kennedy is the swing vote in the SCOTUS, Liberman was the decider and disruptive party in other alternatives to the PPACA. Schumer certainly appears to be the Power Broker when it comes to moneied interests. A documentary “740 Park” gave him a starring role in influencing congressional decisions favoring buisness and individuals. In the end the PPACA was written by Congress with a plethora of influencing people. Hillarycare was written by The White House and Congress snubbed their noses at it. Congress did not pass Obamacare as written in The White House , they passed the PPACA as written in Congress.
This is the best we can do for now. It will morph into something else as time passes.
This is GWB being manipulated by Rove, Cheney, or Rumsfeld. Obama is a smart man who is playing a centrist role in Congress much to many of our dismay. I wish he would have some back bone and had taken the opportunity to break the Reup resistance back. He had the power to do so immediately after the election. There is no negotiation with Teabaggers and the Koch, ALEC, Norquist, etc. backed Repubs.
I just saw a press release from America’s Health Insurance Plans…the industry’s lobbing firm. They are applauding the delay.
I have a question possibly Bruce Webb or someone who is familiar with the PPACA language. Is this unilateral decision by the administration to push back the adoption date legal? I thought the law was pretty clear on implementation dates.
Theorectically, it is the law; but, the President can choose not to enforce the law the same as he did in the case of gay rights. In which case, a Progressive Senate could choose to take him to court.