Gibbs: Employer mandate will be killed

Democrats often claim that ObamaCare should be fixed rather than repealed, although Barack Obama declared that the “debate is over” earlier this week on the law. However, Democrats don’t usually offer much in terms of solutions to the problems that afflict Americans because of ObamaCare, including higher premiums, higher deductibles, and canceled insurance policies. Former White House press secretary Robert Gibbs has one idea for a fix, though — canceling the employer mandate, which he says is all but dead already:


Correction: Robert Gibbs, not Davod Axelrod. My apologies for the error.

“I don’t think the employer mandate will go into effect. It’s a small part of the law. I think it will be one of the first things to go,” he said to a notably surprised audience.

The employer mandate has been delayed twice, he noted. The vast majority of employers with 100 or more employees offer health insurance, and there aren’t many employers who fall into the mandate window, he said.

Killing the employer mandate would be one way to improve the law — and there are a handful of other “common sense” improvements needed as well, he said.

Others include better outreach ahead of next year’s enrollment — educating people about the law’s deadlines, penalties and subsidies; improved technology; and greater incentives, besides not having to pay a low penalty, to young people so they will enroll in health coverage.

And, most importantly, Gibbs said “health care has to add an additional layer of coverage cheaper than the plans already offered.”

This actually is one solution that some progressive commentators suggest when talking about ObamaCare fixes — and it makes at least some sense in terms of policy. The mandate will impose huge costs on employers, tying up their capital in regulatory costs rather than expansion and job creation. In fact, a new study shows that the costs for compliance will run between $4800-$5900 per employee for large employers, and that’s not including the rapidly-rising costs of premiums.


On the other hand, canceling the employer mandate will provide even more incentive for those employers to dump their workers into the exchanges. That means tens of millions more Americans will have to deal with massive price hikes in premiums, and deductibles that all but assure them that they won’t see any benefit from those premiums. It’s a recipe for political disaster — especially if the White House dumps the employer mandate while enforcing the penalties for the individual mandate. Good luck explaining to consumers why Big Business got let off the hook while they get the gaff.

That’s one reason why ObamaCare is a disaster that can’t be fixed, but must be replaced. In my column for The Fiscal Times, I show why the debate isn’t “over” but will actually accelerate:

However, the numbers offered up by Obama on Tuesday fall very far short of the numbers his administration used to argue that a systemic overhaul was needed to address “the fierce urgency of now” with the uninsured, which the LA Times recalls as between 45-48 million.

In fact, it’s not clear at all that the so-called enrollments hailed on April Fools Day offer a break-even point with the uninsured the ACA created. Those numbers are estimated at five to six million Americans in the individual market, many of whom now pay higher premiums and have to clear higher deductibles as the cost of buying more insurance coverage than they believed they needed in the first place.

So how many of these seven-million-plus claimed by Obama actually started off without any insurance at all? The Times reported that from an unpublished Rand Corporation study that of the six million who signed up through Obamacare exchanges for private insurance, a third of those had no insurance previous to the rollout. That would come to 4.4 percent of the low end of the LA Times estimate, if that number represented actual enrollments – but it doesn’t.

The Daily Mail’s David Martosko reports that the same Rand study shows that only 53 percent of those previously uninsured have actually paid premiums for their selection. The Rand estimate of the newly covered comes just short of 859,000 – or just 1.9 percent of the total number of uninsured that Democrats insisted had to be helped through a costly and disruptive overhaul of the health-insurance industry. Even adding in the estimated six million added to Medicaid – most of whom would have qualified without Obamacare – the first pass only accounts for 15 percent of the problem, as defined by Obama and his fellow Democrats in 2009-10.


This system cannot sustain tinkering. Every change creates systemic, fiscal, and political risks that only make the situation worse. Meanwhile, here’s David Plouffe on Bloomberg suddenly decrying “living in the land of anecdote” after the White House used almost nothing but anecdote to sell this monstrosity, and again suggesting that improvements should be made — without ever offering any.

Update: Also up for debate — the honesty of the Obama administration claims made in defense of ObamaCare. Avik Roy dismantles one key claim:

It has been one of Democrats’ favorite talking points: that thanks to Obamacare’s mandate that family-based insurance coverage cover “adult children” aged 18 to 26, “an additional 3 million young adults have gained coverage.” There’s only one problem. That figure is based on a misleading and superficial study by the Obama administration. According to data from the U.S. Census Bureau, the proportion of young adults with private health coverage was 60.5 percent in 2012—exactly the same proportion that had private coverage in 2008. …

Sommers, intentionally or unintentionally, cherry-picked the 2010 baseline that would make his comparisons as flattering as possible. He compared the third quarter of that year, when 49.8 percent had private coverage, with the fourth quarter of 2011, when 58.8 percent did. The full-year averages for 2010 and 2011 were 51.0 and 56.2 percent, respectively; for the first 9 months of 2013, the proportion with private coverage was 58.1 percent.

If you simply use 2008 as your baseline—before the effects of the recession—you still get a positive effect, but a much smaller one. In 2008, the proportion of young adults with private coverage was 55.8 percent; if you assume the entirety of the change in private coverage from 2008 to 2013 is due to Obamacare, you get a coverage expansion of between 869,000 (on a 2008 population base) and approximately 1.04 million (on a 2013 population base). That’s not nothing, but it’s 2 million less than what the Obama administration is claiming.


Well, that’s certainly a stinkburger of a claim, no?

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