Will Obamacare Kill Jobs? More Fictions and Facts

Posted on June 19, 2013 by Maggie Mahar

— Fiction: No doubt, you’ve heard that Obamacare will cripple small businesses, the “engine of job growth in America.” In 2014 employers with more than more than 50 full-time workers will have to provide insurance—or pay penalties. If more than 30 of their workers go to the individual Exchanges and receive government subsidies in the form of tax-credits, the business will have to help cover those subsidies by paying a fine of $2000 to $3000 per employee.

Obamacare’s critics speculate that many employers will stop hiring, so that they have no more than 49 full-time employees.

–Fact: As of 2010, there were roughly 5.7 million small employers in the U.S. (defined as those with fewer than 500 workers.) Ninety-seven percent of them have fewer than 50 employees. In other wrods, Obamacare’s employer mandate applies to only 3% of small businesses.

And 99% of those with more than 50 employees already offer insurance. The employer mandate will affect just a tiny sliver of small companies. Lawmakers understood this when they wrote the legislation.

–Fiction: In 2014, many small employers will trim full-time workers’ hours and we will become a nation of part-time employees. Small business owners know that if they have fewer than 50 full time workers (averaging 30 hours a week) they won’t have to pay a penalty, and their workers can go to the Exchanges where individuals can purchase their own insurance, and receive those generous tax credits.

–Fact: This bit of fear-mongering overlooks the fact then when the government counts “full-time employees” it doesn’t just count heads, it counts hours.The law says that the firm must offer insurance if it has 50 full-time “or full-time equivalent employees.”

Here is how the rule works: If a business has 50 full-time employees working 30 hours a week and cuts 10 back to 15 hours, it will have only 40 full-time employees. But it will have to hire more part-timers to cover holes in the weekly schedule.

Assume the company hires 20 new part-time employees, each working 15 hours a week. Because they will be putting in 300 hours a week the government will count them as ten “full-time equivalents.” Add those ten to the remaining 40 full-time workers, and the company then will have 50 full or “full-time equivalent’ -employees.

The business won’t have to insure the 20 part-timerswho work only 15 hours, but it will have to insure the 40 who work full-time—or pay the penalty..

This fiction also overlooks why employers offer benefits. Research reveals that when a business insures workers, it enjoys higher productivity, better morale and lower absenteeism.

This explains why roughly 95% of companies with more than 30 employees provide health insurance.

—Fiction: Chain restaurants, retailers and hotels can easily cut thousands of workers to part-time so that they don’t have to insure them.

— Fact: Organizing a company’s hiring and staffing around making sure that it won’t have to offer health benefits is hardly a brilliant business plan

Imagine what cutting full-time workers’ hours will do to morale and productivity– not to mention customer service.

Consider this Wal-Mart has stopped hiring full-time employees, and is relying on part-timers and temps. As a result, Forbes reports that Wal-Mart is experiencing “complaints about understaffed stores with empty shelves and inventory piling up in warehouses and back rooms.”.

“It seems even Wal-Mart can’t operate on such a lean staff,” writes Forbes contributor Laura Heller, who describes herself as “a retail geek/expert.”

“Dirty stores, parking lots in disarray and out-of stock products don’t bode well for sales and stores can’t operate that way for long periods.”

Meanwhile, Target, one of WalMart’s chief competitors, continues to offer health care benefits to part-time employees, even though the ACA doesn’t require that it insure them.
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Obamacare– Fear-Mongers Poison Minds; Hatred Blinds

Posted on June 18, 2013 by Maggie Mahar

Judith Mayer Lynn, uninsured and battling breast cancer, should be a fan of the Affordable Care Act. Instead, Bloomberg reports, she know little about it. When Bloomberg interviewed the 56-year-old she was unaware of subsidies in the law that will help people like her buy coverage in 2014,. “Lynn didn’t know the Affordable Care Act requiresthat insurers to pay for prescription drugs, hospital stays and other services she’s spent the last two years scrimping to afford. Nor did she realize she can no longer be denied a policy due to her illness”.

When told of the benefits, “Lynn remained unconvinced, skeptical of insurers and government alike. ‘It’s a joke,’ she said. ‘There’s going to be loopholes in all of these provisions.’”

If you showed Lynn the list of “essential benefits” that insurers will have to include in the policies they sell to people like her, could you persuade her to read the list—and explain where she saw the holes? Probably not. Her mind is closed.

In an interview at an Access to Healthcare office in Las Vegas, Lynn said she was unaware of those benefits — and didn’t trust Obama to produce them anyway.

The Poison: Hatred

Perhaps I shouldn’t be surprised. We live in a nation where in 2009, a U.S. Congressman felt free to shout out “You Lie” during a televised presidential speech to a joint session of Congress.

(President Obama had just said that the legislation would not mandate coverage for undocumented immigrants. This is, of course, correct. South Carolina Rep. Joe Wilson (R) later apologized.)

Yet that didn’t stop another Congressional Republican from calling out the President earlier this month. In a scathing speech on the floor of the House, Rep. Jim Bridenstine (R-OK) derided President Obama as a “dishonest, incompetent, vengeful liar” who lacks a “moral compass.” Bridenstine cited HHS Secretary Kathleen Sebelius’ efforts to promote enrollment in the Affordable Care Act as one reason that President Obama is “not fit to lead.”

Bridenstine didn’t apologize. Instead, the next day he told a talk show host that he had “gotten great encouragement” for his remarks from fellow Republicans. /

I have followed U.S. politics for many years. Never have I seen a president so hated—not Nixon, not LBJ at the height of the War in Vietnam..

Politicians Are Not Alone in Teaching Americans Not to Trust Obamacare

Lynn recalls one of her surgeons telling her that he was leaving the business because the health-care law dictates what he can charge patients. This, Bloomberg notes, is “something the legislation doesn’t do. “

Why would a surgeon claim that the Affordable Care Act will be setting his rates? Presumably he reads newspapers. How could he be so uninformed?

“There is a lot of distrust,” Sherri Rice, chief executive officer at Access to Healthcare explains. When her nonprofit group began asking members about the ACA last month, about half knew little about its provisions and another quarter were “furious” about it, she told Bloomberg.

Such anger makes it difficult to think clearly—or take in information. This may explain why Lynn’s surgeon thinks that under the ACA he will be told what he can charge patients. Perhaps he, too, is so “furious” that the facts don’t register. Hatred blinds.

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Who Will Sell Insurance In the Exchanges? Non-profit Insurers.For Consumers, This is Great News– Part 1

Posted on May 25, 2013 by Maggie Mahar

You may have heard that big for-profit health insurers are taking a “wait-and-see” attitude toward the Exchanges –the one-stop marketplaces where small businesses and individuals who don’t receive benefits at work will be able to buy insurance.

Both UnitedHealthGroup, the nation’s largest carrier, and Aetna the third-largest, have told analysts that their involvement in the health insurance marketplaces across the country will depend on whether they find them “financially viable” for the companies WellPoint, Humana and Cigna also have indicated that they will participate in a “limited” number of markets. /

Aetna is being particularly coy. On a conference call with investors and analysts just three weeks ago Aetna officials said that if they don’t like the way the market is shaping up they “might pull their products from the online marketplaces at the last minute.”

Is this meant as a threat? One can only imagine the chaos that would ensue if Aetna began pulling out of state Exchanges at the 11th hour. The remark demonstrates how little concern Aetna has for its customers.

Doomsters say Too Few Plans Will Mean Higher Premiums

Many have been predicting that the Exchanges will fail because the big names won’t be participating. They point out that in Illinois “only six insurance carriers have told the state of they want to sell health policies on the state’s online s marketplace. “ The critics warn that if not enough companies offer coverage in the Exchanges, consumers won’t have enough choices, and their won’t be enough competition to keep a lid on prices.

Former insurance executive turned industry consultant Robert Laszewski is quick to pounce on “the Illinois numbers” as “an early indicator that insurance companies are backing away from full participation in the online marketplaces. . . I’m hearing that from other carriers in other parts of the country as well” he told Chicago’s Crain’s Business. “They are terribly fearful that if there’s a poor launch (of the marketplaces) they’re going to get blamed for a mess.”

Laszewski has been predicting “sticker shock” in the Exchanges for some time. What he ignores is that what matters most is not the number of plans available in the Exchanges, but how good they are. Quality, not quantity is what counts.

In the end, “robust competition” does not depend on the free-market chaos of 20 or 25 plans vying for market share. It turns on a few good companies offering transparent information. Then, and only then, can consumers compare them and make rational decisions.

California Disproves the Critics

California already has demonstrated that the doomsters are wrong. Two days ago, the state unveiled the offerings that will be available in its Exchanges—along with the prices. Nearly three dozen plans had submitted bids, and 13 were selected. (California exchange officials rejected bids that were too expensive, or failed to include enough choices of doctors and hospitals.)

Sure enough, the brand name for-profits are not going to peddle their products in the California Exchange.

But as it turns out, they weren’t needed to create a competitive affordable market that offers Exchange customers a wide range of choices. As I discuss below, Kaiser, which ranks #1 in the state for both quality and consumer satisfaction will be part of that marketplace.

In every region in the state, individuals who don’t have health benefits at work will be able to purchase comprehensive insurance that offers free preventive care, covers the 10 essential benefits, and caps out-of-pocket spending for less than $4,000 a year. (In North Los Angeles County, for example, Kaiser will offer a Silver Plan for just $294 a month.) This is significantly lower than expected: the Congressional Budget Office (CBO) had estimated that such comprehensive coverage would cost $5200.

Four thousand dollars might sound pricey for a middle-class family, but keep in mind that individuals reporting modified adjusted gross income (the number at the bottom of the first page of your tax return) of less than $45,960, as well as families earning as much as $94, 200 will be eligible for federal subsidies that will help them cover their premiums.