NPR explains all taxes and mandate costs in ObamaCare story
posted at 10:01 am on May 14, 2014 by Ed Morrissey
Yesterday, I skewered NPR for its impossibly sunny look at the movement by large employers to dump workers into ObamaCare. They do much better today with a close-up look at one employer in Cleveland, the catalog retailer AmeriMark, which has 700 employees and a skyrocketing cost problem with health-insurance premiums. None of this will surprise ObamaCare critics, even while the law’s supporters insist that nothing serious is amiss. This profile is worth an extended look, though, because it drives to the heart of who pays for mandates, taxes, and other imposed costs:
AmeriMark, like most businesses, has been coping with rising health insurance premiums for years. This year, the company’s initial estimate from a broker was a 30 percent increase in the price of premiums if they stayed with the same insurance provider. Lyons said they shopped around, chose a new company and changed some of the policy’s benefits – such as increasing the deductibles and co-pays that employees pay as their contribution to their own health coverage. Such changes in plans have become increasingly common nationally in recent years as annual increases in health care premiums have become normal.
For many medium-sized companies, like AmeriMark, the new costs of the Affordable Care Act are an added burden on top of the health insurance premiums that have been rising for years. The largest of the new Obamacare costs, is the health insurance provider tax, or HIT. It’s a tax that the federal government charges insurance companies and the size of the fee depends on how many people the insurer is covering.
Insurers then pass that cost on to employers. And employers, in turn, pass some or all of the cost on to their workers.
It’s a kind of trickle-down sales tax, according to Clare Krusing, a spokesperson for America’s Health Insurance Plans, an industry trade group.
A few weeks ago, I was visiting a family member in a nursing home, and overheard a conversation between two of the workers about their health care. Their contributions had jumped significantly, as had the deductibles, not unlike what AmeriMark employees are now experiencing. These two men, who work in the health-care field, concluded the conversation by lamenting, “I thought the Affordable Care Act was supposed to be affordable.”
When government imposes mandates and taxes on businesses and employers, those costs get paid by their consumers and their employees. Businesses always pass costs along to consumers or cut costs within the business. ObamaCare is no different, except now the cost spikes are so significant that it’s put alternatives on the table that had been ignored for years due to corporate inertia. Note well that while NPR says that AmeriMark had been struggling for “years” over rising premiums, the 30% increase came on their existing plans in one year.
Enrollment in California’s healthcare program for the poor has soared as the state implements President Obama’s federal overhaul, pleasing advocates who have sought expanded coverage but also presenting new costs for the state.
Nearly one-third of California’s total population — roughly 11.5 million people — will be enrolled in Medi-Cal next year, according to Gov. Jerry Brown’s administration.
Enrollment is expected to exceed previous estimates by 1.4 million, and administration officials said it would cost the state $1.2 billion more than originally thought.
While unveiling his newest budget proposal on Tuesday morning, Brown said expanded healthcare coverage represented “a huge social commitment on the part of the taxpayers of California.”
“I’m proud we did it,” he said. “But we also have to take into account this thing is growing.”
This will only surprise those who thought the ACA actually meant affordable health care.