National Journal: Affordable Care Act actually looking pretty unaffordable

posted at 11:21 am on August 29, 2013 by Erika Johnsen

In July, the White House was in a tizzy of excitement over a New York Times article proudly proclaiming that ObamaCare was going to help to bring down New Yorkers’ insurance premiums (casually neglecting to mention that New Yorkers pay some of the highest premiums in the country due to their already ObamaCare-esque system, and that the ACA’s individual mandate will help them out by tamping down more healthy taxpayers), and President Obama seized on the story with gusto in his next speech as evidence of ObamaCare’s effectiveness in bringing down costs for Americans everywhere.

Au contraire, says National Journal in a newly released independent analysis. “For the vast majority of Americans,” they conclude, premium prices will be higher in the individual exchanges than what they are currently paying for employer-sponsored benefits:

Whether the quality of care in the new market is comparable to private offerings remains to be seen. But one thing is clear: The cost of care in the new market doesn’t stack up. A single wage earner must make less than $20,000 to see his or her current premiums drop or stay the same under Obamacare, an independent review by National Journal found. That’s equivalent to approximately 34 percent of all single workers in the U.S. seeing any benefit in the new system. For those seeking family-of-four coverage under the ACA, about 43 percent will see cost savings. Families must earn less than or equal to $62,300, or they, too, will be looking at a bigger bill. …

“In 16 states that HHS studied, premiums were on average almost 20% lower than what the Congressional Budget Office projected,” Peters wrote in an e-mail.

Premiums may be lower than predicted, but they’re not competitive with what workers are now paying for employer-sponsored care. …

The truth is, Obamacare is doing what it was intended to do: make health care affordable for the nation’s lowest earners by spreading out the costs among taxpayers.

Hey, remember President Obama’s erstwhile promise to not raise taxes on the middle class? Sorry, Democrats, but there aren’t enough “fair share” tax payments from the wealthy that could even come close to remotely defraying this sucker by their lonesome.

And of course, the sprawling consequences of ObamaCare for both the middle class and the working poor aren’t merely confined to higher taxes — as the National Journal article also points out, employers are going part time and dropping jobs right and left in anticipation of compliance, precisely none of which is going to help fuel our economy back into robust-prosperity mode:

Bureau of Labor Statistics data show that the ratio of part-time to full-time jobs has completely flipped this year from historical trends.  Last year, six full-time jobs were created for every one part time job.  This year, only one full-time job is being created for every four new part-time jobs.

The shift to part-time has accelerated over the past several months because of the “look back” provision in ObamaCare that sets the baseline this year for the number of full-time workers a company employs to determine their compliance with the employer pay-or-play mandate. …

According to a survey by the U.S. Chamber of Commerce, 71% of small businesses say the health care law makes it harder to grow.  One-half of small businesses that must comply with the employer mandate say they will either cut hours of full-time employees or replace them with part-time workers. Twenty four percent say they will reduce hiring to stay under 50 employees.


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Comment pages: 1 2

The NJ article assumes that if an employer drops coverage, they won’t raise wages to compensate. That defies the laws of supply and demand for labor.

red_herring on August 29, 2013 at 11:27 AM

Unfortunately, the employers will be paying that lost “compensation” to the government, in higher penalities and taxes.

We employee’s will be in the bread line, hoping that the there’s enough.

Deafdog on August 29, 2013 at 1:53 PM

But if that really is the winning strategy, why aren’t companies A and Y already doing it? Why are they being “forced” by OCare to do it?

red_herring on August 29, 2013 at 12:32 PM

Because the part you’re not taking into account is that employers are not dropping coverage to lower their TCO, such that they could just as easily drop the salary and keep the benefits.

The problem is that the cost of the benefits are increasing, 40% here in my home state. That represents a significant burden to the employer who pays some or all of that cost as a benefit. And that’s assuming they aren’t hit with an ADDITIONAL cost of having to upgrade their plan to one of the comprehensive offerings mandated by OCare. OR, they have the option to just pay the corporate tax penalty instead. There is no scenario in which costs do not go up for an employer paying benefits.

The problem is that you are seeing this as employers trying to reduce their existing cost; they’re not. They’re trying to defray the significant INCREASE in costs coming around the bend.

The Schaef on August 29, 2013 at 1:59 PM

We employee’s will be in the bread line, hoping that the there’s enough.

Deafdog on August 29, 2013 at 1:53 PM

Hopefully there will be some of that commodity cheese to take home, too. Maybe some Vietnam era spam too.

oldroy on August 29, 2013 at 2:01 PM

Dana Carvey looks awful constipated in that photo.

coldwarrior on August 29, 2013 at 4:27 PM

The NJ article assumes that if an employer drops coverage, they won’t raise wages to compensate. That defies the laws of supply and demand for labor.

red_herring on August 29, 2013 at 11:27 AM

Have you seen the demand for labor lately? Hint: It’s pretty damn low. Labor has zero leverage. Of course employers aren’t going to raise wages anytime soon. Look around you, instead of at your macro textbook! They wont raise wages until they have to, meaning additional burdens on new graduates already weighed down with undischargeable student loans and now having to subsidize older, healthier workers’ insurance costs. Gosh, how awesome this admin is for the young people!!!

alwaysfiredup on August 29, 2013 at 5:10 PM

ObamaCare was going to help to bring down New Yorkers’ insurance premiums …

IF you choose a bronze plan.

Your premium will be less.
You will be only covered for the things in the Bronze Plan.
You will now have a high deductible instead of a higher premium.

Basically your new cheaper plan will not cover anything you need until you pass the deductible or get your pre paid “free” birth control pills, you will pay lots in and not have the same benefits as you have before, but you will have the option of paying a lower premium.

In NY, for the expense, the plans used to be better than the one Ms. Sebelius designed for the people of Kansas. They must want this, yes?

Fleuries on August 31, 2013 at 10:19 AM

Comment pages: 1 2