Great news: ObamaCare will provide a boost for … temps

posted at 1:21 pm on March 26, 2013 by Ed Morrissey

Perhaps the Law of Unintended Consequences makes an impact in no area more so than it does in government regulation. Take for instance the noble-minded effort to reform campaign finance regulation after Watergate.  The attempt to get big money out of politics ended up creating a Byzantine labyrinth of money classifications that no only failed to get money out of politics, it ended up relieving political parties and candidates from any responsibility for the negative and cruel campaigns that big money now funds. When government passes regulation, people find ways to work around them to minimize their costs.

Today, the Washington Post discovers that the Law of Unintended C0nsequences applies to ObamaCare, too.  Thanks to the massive costs added to hiring full-time workers, businesses now want to operate on cash-only relationships with labor:

The health-care law could prove to be a boon for temporary-staffing companies as employers outsource jobs to sidestep complex requirements for medical insurance.

But some experts say the Affordable Care Act’s exceptions for temporary employees could undercut the goal of expanding coverage to more American workers.

“That could lead to an increase in part-time workers” who lack insurance, said Susan N. Houseman, an economist at the Upjohn Institute for Employment Research who studies staffing companies. “You regulate something and people will always try to find a way around the regulation.”

No kidding?  Who could have seen that coming?  Only anyone who ever worked in the private sector, and/or anyone who could do math.  Unfortunately, those two descriptions don’t apply to hardly anyone in the Obama administration, nor in the Democratic Congressional caucuses who managed to pass this bill without ever thinking about the perverse incentives it set up for the business sector.

Speaking of incentives, guess which part of the economy seems most attractive to investors these days?

Starting in January, employers with at least 50 workers must offer affordable coverage or pay a penalty. To stay under this limit, some are considering outsourcing jobs to specialists such as Kelly Services, Manpower, Robert Half and Randstad, whose stock prices have soared.

“We are already getting inquiries from our client base for companies in and around 50 [employees], asking us to help them understand this legislation, and to inquire as to how we might be helpful,” M. Keith Waddell, Robert Half’s president, told investors on a conference call a few weeks ago. “Our response is that we can legally help them remain under 50.”

And it’s not just the smaller businesses that are turning to temps:

The health law is also prompting larger organizations to use temp agencies. By requiring employer coverage only for those who put in at least 30 hours a week, the act appears to create an incentive for companies to do less with permanent workers and more with part-timers, which are the main focus of staffing agencies.

Even in this, larger corporations will have an advantage.  From personal experience hiring temps for projects, I know that larger corporations negotiate for standing rates that give them lower costs than smaller competitors get from these temp agencies.  For my first ever project at a large multinational corporation, I decided to conduct an open-bid process among the firm’s approved vendors for a temporary staff, against the advice of my amused boss who told me it would be a bigger headache than it was worth — and he turned out to be right, although I got a price below even our negotiated level in the end. As my boss told me, it cost me more in time than I saved, but it underscores the point that these kinds of interventions tend to favor larger firms, even indirectly and probably unintentionally.

Instead of building a strong and stable economy for the future, ObamaCare undermines the employer/employee relationship, the structure of full-time employment, and in doing so destroys the assumptions of costs in the public-subsidy program in the ACA on which the claims of budget neutrality were based.  The worst part of this is that this outcome was entirely predictable, and in fact was predicted, but Democrats cared more about sticking Americans with a mandate than they did about undermining a fundamental relationship that is key to a stable economy.


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Whatever, we’re all getting free health care.

Bishop on March 26, 2013 at 1:24 PM

Well knock me over with a feather!

sandee on March 26, 2013 at 1:27 PM

Are you just going to keep writing the same column every other week or so?

Aquateen Hungerforce on March 26, 2013 at 1:28 PM

Healthcare is FREEEEEEEEEEEEEEEEEEEEEEEEEEEEEEE!!!

We’re all going to get to see the doctor 3x a week, we’re getting all our meds (and we want a bunch) for free. In fact, the Federal government will PAY US TO EAT RIGHT.

WWWWWWWWWWWWWWWWWWWWWWEEEEEEEEEEEEEEEEEEEEEEEEEEEEE,it’s all

FREEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEE!!

PappyD61 on March 26, 2013 at 1:31 PM

Instead of building a strong and stable economy for the future, ObamaCare undermines the employer/employee relationship, the structure of full-time employment, and in doing so destroys the assumptions of costs in the public-subsidy program in the ACA on which the claims of budget neutrality were based. The worst part of this is that this outcome was entirely predictable, and in fact was predicted, but Democrats cared more about sticking Americans with a mandate than they did about undermining a fundamental relationship that is key to a stable economy.

“What’s an economy?”
/Dems

Bitter Clinger on March 26, 2013 at 1:32 PM

To I need to create a new shell company that hires temp workers to my main company?

WashJeff on March 26, 2013 at 1:34 PM

Are you just going to keep writing the same column every other week or so?

Aquateen Hungerforce on March 26, 2013 at 1:28 PM

Somebody got up on the wrong side of the bed this morning.

Bitter Clinger on March 26, 2013 at 1:34 PM

All the world’s a stage [farce], And all the men and women merely players

Fenris on March 26, 2013 at 1:35 PM

All of this poop because FDR thought a wage freeze was a good idea and companies had to work around that dumb idea!

WashJeff on March 26, 2013 at 1:36 PM

“What’s an economy?”
/Dems“

Bitter Clinger on March 26, 2013 at 1:32 PM

It’s a gigantic never ending pool of money that needs to be transferred from the private sector to the public sector for the children.
-Marxists for Properity

antipc on March 26, 2013 at 1:41 PM

Getting the French maximum 30 hour work week by a different means.

besser tot als rot on March 26, 2013 at 1:42 PM

Perhaps the Law of Unintended Consequences makes an impact in no area more so than it does in government regulation.

Unintended? I beg to differ. All this was fully intended.

Did you forget your Cloward – Piven, Your Saul Alinsky?

LegendHasIt on March 26, 2013 at 1:43 PM

To I need to create a new shell company that hires temp workers to my main company?

WashJeff on March 26, 2013 at 1:34 PM

Just hire the Amish.

Happy Nomad on March 26, 2013 at 1:44 PM

Are you just going to keep writing the same column every other week or so?

Aquateen Hungerforce on March 26, 2013 at 1:28 PM

Has any aspect of Obamacare improved in the last week or so?

Happy Nomad on March 26, 2013 at 1:45 PM

Whatever, we’re all getting free health care.

Bishop on March 26, 2013 at 1:24 PM

Yes! And just wait until we start deciding other things as rights…can’t wait for my free: WiFi, iPhone, HD cable tv, filet mignon, car, house, etc etc etc

nextgen_repub on March 26, 2013 at 1:46 PM

My new company: ’50 or Less, Inc’

BobMbx on March 26, 2013 at 1:46 PM

Yes! And just wait until we start deciding other things as rights…can’t wait for my free: WiFi, iPhone, HD cable tv, filet mignon, car, house, etc etc etc

nextgen_repub on March 26, 2013 at 1:46 PM

Don’t forget your new free gay friend.

BobMbx on March 26, 2013 at 1:47 PM

Wonder if there will be a new ‘regulations’ in bhocare to deal with the temp issue? Can’t have businesses going around bhocare now can we?
L

letget on March 26, 2013 at 1:50 PM

Don’t forget your new free gay friend.

BobMbx on March 26, 2013 at 1:47 PM

We get a gay bestie too?!? Man, this utopia just keeps getting better. This next generation will laugh at the time in history where people actually had to pay for their stuff.

nextgen_repub on March 26, 2013 at 1:51 PM

America is now being ruled by morons and psychopaths.

VorDaj on March 26, 2013 at 1:56 PM

Whatever, we’re all getting free health care.

Yup, we all will be working 19 hours or less a week on just above minimum. Hey, but we’ll have free health care. Just make sure you make your doctor’s appointment at least two years in advance, because available time slots fill up fast.

hawkeye54 on March 26, 2013 at 1:56 PM

America is now being ruled by morons and psychopaths.

Yo’re a little late. I sorta noticed that about four years ago.

hawkeye54 on March 26, 2013 at 1:58 PM

welcome to obamaland, home of the lost generation.

RedInMD on March 26, 2013 at 1:59 PM

Instead of building a strong and stable economy for the future, ObamaCare undermines the employer/employee relationship, the structure of full-time employment, and in doing so destroys the assumptions of costs in the public-subsidy

Within the next 10 years, about 40% of Americans will be self-employed or contractors. To look at the US healthcare system in its old structure as a great model for tomorrow is simply wrong.

The future is more digital health innovation, better incentives that align with patient outcomes, and great patient involvement in decisions with a cost component.

bayam on March 26, 2013 at 2:01 PM

Great news: ObamaCare will provide a boost for … temps to serve the ruling elites in DC as well as unions and large democratic donors.

Corrected

acyl72 on March 26, 2013 at 2:13 PM

Great news: ObamaCare will provide a boost for … temps indentured serfs to serve the ruling elites in DC as well as unions and large democratic donors.

Corrected

acyl72 on March 26, 2013 at 2:14 PM

Long term, after existing doctors retire en masse and fewer choose to spend a decade or more beyond under-grad school to become one, it will get easier and easier to get a doctor’s license. Especially when the government runs health care and they cannot be sued anymore. Look how easy it is to become a doctor in Cuba. Apparently they have one of the best “doctor” to patient ratios in the world.

Forward, comrades!

farsighted on March 26, 2013 at 2:16 PM

Wwould it be wrong to hope that those two bootlicking scum wearing the white coats die a slow and painful death from some easily treatable disease because some bureacrat took 6 months to approve treatment of them? Because they were here legally they could not get treated at any of the numerous clinics set up for illegal aliens and had to wait in line with all the other peasants.

Of course, after taking treatment matters into their own hands they were discovered by that same bureacrat and had to remand their medical license for life. They were banished from all medical work or facilities.

They then ended up being indentured serfs gardening and prositituting themselves for food money from the same DC elite they sold their soul to for 30 pieces of silver?

acyl72 on March 26, 2013 at 2:21 PM

Look how easy it is to become a doctor in Cuba. Apparently they have one of the best “doctor” to patient ratios in the world.

Forward, comrades!

farsighted on March 26, 2013 at 2:16 PM

And don’t forget, Chavez heartily endorses Cuban healthcar…oh wait!

HotAirian on March 26, 2013 at 2:23 PM

Instead of building a strong and stable economy for the future, ObamaCare undermines the employer/employee relationship, the structure of full-time employment, and in doing so destroys the assumptions of costs in the public-subsidy

Within the next 10 years, about 40% of Americans will be self-employed or contractors. To look at the US healthcare system in its old structure as a great model for tomorrow is simply wrong.

The future is more digital health innovation, better incentives that align with patient outcomes, and great patient involvement in decisions with a cost component.

bayam on March 26, 2013 at 2:01 PM

Yeah, I often think of the government when I think of the concepts you’ve espoused. Few enitities better than the them for innovation, incentive/cost cutting, competence/outcomes, solicitation and inolvement of the patient.

You are deluded and I’m sure you aren’t subject to obamacare. You have your own “seperate but equal” healtcare. You’d have made a great plantation owner. No morals and the ability to delude yourself that your selling out your kids and grandkids was a good thing for them.

acyl72 on March 26, 2013 at 2:27 PM

Somebody got up on the wrong side of the bed this morning.

Bitter Clinger on March 26, 2013 at 1:34 PM

Cut him some slack, BC. He obviously just got back out of the “home”. (He hasn’t posted here since early last year, except for a post on yesterday’s Huckabee thread.) He needs to move slowly back into the mainstream of trolling.

GWB on March 26, 2013 at 2:27 PM

No morals and the ability to delude yourself that your selling out your kids and grandkids was a good thing for them.

acyl72 on March 26, 2013 at 2:27 PM

Really? You think bayam reproduced?

GWB on March 26, 2013 at 2:31 PM

Within the next 10 years, about 40% of Americans will be self-employed or contractors wards of the state.

bayam on March 26, 2013 at 2:01 PM

FIFY

To look at the US healthcare system in its old structure as a great model for tomorrow is simply wrong.

bayam on March 26, 2013 at 2:01 PM

I’ll grant you that. Its old structure wasn’t exactly great, either, what with mandates all over the place, no real individual market, perverse incentives, and hidden costs. However, to think Obamacare is a better route (rather than simply ratcheting up the problems with the old system a few notches) is just delusional.

GWB on March 26, 2013 at 2:37 PM

Here’s the socialists’ plan…

Since the government is getting more and more involved they do not want anyone to see a degradation in their existing health care, especially Medicare patients, for at least a decade. Any sooner and the Dems will start losing too many elections.

They don’t really care if costs go up as long as they can blame the increases on a “broken system” exploited by evil greedy capitalists, health insurance companies, doctors, hospitals, and other health care providers and facilities. This will enable them to call for more and more government intervention, to alleviate the “crisis”, until the government essentially takes over the industry.

Once the point of no return is reached, where there is no other feasible option other than to let the government run it all, then people will start seeing a degradation in care and services. At that point the excuse will be that “hard decisions must be made” for the good of the population as a whole and in the interest of “fairness”.

farsighted on March 26, 2013 at 2:44 PM

“Our response is that we can legally help them remain under 50.”

Prediction: class action lawsuits against employers who reduce hours or hire temps to evade The King’s Edicts.

PattyJ on March 26, 2013 at 2:47 PM

farsighted on March 26, 2013 at 2:44 PM

Also…

Don’t think the socialists haven’t thought this through. They do not want people, especially seniors, to start griping about the quality of their health care any time in the near future. That is, not unless they can blame it others.

The only hope is that they miscalculated and things will get worse too quickly and that costs will escalate faster than expected. This could easily happen considering they have no idea and how markets work how people really behave economically.

farsighted on March 26, 2013 at 2:50 PM

ACK, I hate this auto page reloading that was put here at HotAir once Michelle sold it to the current owners. Very inconvenient when trying to post from an iphone and all of the one finger pecking on the iphone goes “poof” in the reload. Very inconvenient.

Now I am on the old fashioned laptop. Here is my post, once again.

Did you all see the link at drudge today where the 60+ page application for the subsidized policies includes a section about whether or not someone is registered to vote. I didn’t download that prototype application to read the section myself, but the Chair of the House committee apparently has told the HHS Secretary in a letter that it implies that one needs to be registered to vote to get the application approved.

Can you imagine the old ACORN, SEIU, or even AARP being official enrollers and they, then, register this new army of entitlement voters? In addition, that article mentioned that some groups are upset that people convicted of crimes can’t be enrollers and they are challenging that requirement.

Well, to get an insurance license, you have to have a squeaky clean record because you are dealing with very confidential and sensitive information when gathering information to get someone properly insured. Who wants a bunch of convicted felons getting all of this personal information?

And why do we have a 60+ page application? Since pre-existing conditions are precluded from being denied coverage, other than the family members, and overall family income and employment, what else needs to be asked for this subsidy?

Something is really fishy about this application.

Now back to this topic. This law, as written (and in my opinion, as intended), is going to cause this whole industry to implode.

They are not going to be ready to massively enroll millions through these exchanges. The feds are not prepared to take the burden on in the federal exchange since a majority of the states are not setting up individual exchanges and expanding medicaid, thus putting even more demand on the exchanges, etc.

Even MI, while the gov finally tried to cave in to the extra bribe money to supposedly defray the cost of setting up the state exchange and expand medicaid, was blocked by the Legislature who refused to play along and did NOT even appropriate the necessary funds for the state matching needed to get the extra fed money. They shot down the gov’s last ditch efforts last week and adjourned until the middle of April. The deadline to do a state/fed partnership exchange (or agreement to do) is April 1. So MI is now on the “NO” side of the Obamacare coin and is not doing any exchange, even with a federal partnership. So everyone in MI is going to have to go to the federal exchange.

The funding in that bill was not setup for a majority of the country to default to the federal exchange. And apparently there is this delicious oversight in the bill where NONE of the penalties kick in for the residents or employers in these states because the law only addresses the penalties when employees have to get their insurance through a state exchange. The morons who drafted the law never envisioned so much blowback from the states, and thus didn’t have the federal exchanges included in the penalty section of the law.

This is just too funny for words.

karenhasfreedom on March 26, 2013 at 3:02 PM

and great patient involvement in decisions with a cost component.

How? How is this an aspect of government mandated insurance? Delusional does not even begin to describe your statement. The main, I would say the primary, reason things are so screwed up is because cost is not a factor in patient-side decision making. That’s what comprehensive coverage does. It removes cost-based decision making you fool.

WitchDoctor on March 26, 2013 at 3:06 PM

The odious Obamacare changes the economics of business in many more ways. For one, it tilts the overtime vs new hires balance in favor of working your existing headcount harder to avoid that expensive new hire. If you now have 55 employees, you can get down to 49 with only 6% overtime.

Second, it changes the economics of mechanization and robotics in favor of fewer humans and more machines. For example, if you are at 45 employees with a few pizza restaurants and you want to grow, a dough machine looks a little more attractive in the post-Obamacare world.

Third, outsourcing doesn’t only mean headcount, it can mean subassemblies of the product. Using the previous example, you might simply start buying frozen pizza crusts from another company and trim your kitchen staff.

slickwillie2001 on March 26, 2013 at 5:04 PM

LegendHasIt on March 26, 2013 at 1:43 PM

Exactly, we need to realize we’re dealing with people who intend for these things to happen. Once you acknowledge the ill intent, you can better combat their efforts.

jnelchef on March 26, 2013 at 5:17 PM

The future is more digital health innovation, better incentives that align with patient outcomes, and great patient involvement in decisions with a cost component.

bayam on March 26, 2013 at 2:01 PM

Mwaahaaahaaahaahaa!

Yup, digital health innovation cuts costs,hahahahahahahahahaha! You know, the EHR’s actually increase costs by decreasing productivity, plus they add reminders to do maintenance care, much of which would not have been done, so patients wind up getting more care that has no cost benefit, plus the EHR’s are so hard to use it takes multiple specialists in the EHR’s to help the usual health care workers. The hospital I’m working at now has to have pharmacists round on all the floors because the medication orders are so difficult to enter in the computer.

In my experience, the only time patients care about the cost is if they have to pay for part of it. Obamacare is the antithesis of patient involvement in cost containment, which is why it will send health care costs skyrocketing.

talkingpoints on March 26, 2013 at 9:40 PM

In my experience, the only time patients care about the cost is if they have to pay for part of it. Obamacare is the antithesis of patient involvement in cost containment, which is why it will send health care costs skyrocketing.

talkingpoints on March 26, 2013 at 9:40 PM

Spot on.

The socialist social engineers who arrogantly think they completely understand and can centrally plan, control, and micromanage the US health care market and industry and all associated costs are little different in that attitude from the Bolsheviks who thought they could do the same to the entire economy of the Soviet Union.

The bottom line is that socialists hate free markets, free enterprise, and the freedom of people to make their own economic choices. They think they can do better through centralized economic planning and control. They could not be more wrong.

farsighted on March 27, 2013 at 10:38 AM