Obama plays silly politics with health care reform

The Obama administration’s announcement – made public on an obscure government blog – that they are delaying until 2015 the implementation of Obamacare for businesses is a slap in the face to those organizations and individuals who have faithfully supported the Affordable Care Act from day one.

All you need to know are a few basic figures. Some 96 percent of businesses will not be affected by Obamacare. A Small Business Administration official told me recently that of that remaining 4 percent -- 240,000 of the nation’s 6 million employers -- when you subtract those that already offer insurance to their workers and others which, due to a variety of factors are not impacted, the figure shrinks to 10,000 companies that have to make some decisions due to the ACA.

That’s significantly less than 1 percent of the nation’s employers.

Yet, the Obama administration, rather than explaining the realities to the American people, ducks for cover in the face of criticism from business groups and, with the 2014 mid-term elections approaching, they obviously bowed to the concerns of congressional Democrats.

We have less than 1 percent affected, maybe half of those are confused or unsure what to do between now and Jan. 1, and the president buckles.

The reason that those affected are so small is simple: Obamacare only affects businesses with 50 or more full-time employees. Some 94 percent of those companies just above that threshold – 50 to 199 employees – already offer health care coverage.

What Obama has done with this decision is to allow the right-wing conservatives and tea party types to gloat and further the perception that ACA implementation is a "train wreck." While the nation is still thoroughly confused about Obamacare (one recent poll found that about 40 percent of Americans mistakenly thought the law had been repealed) this move by the White House expands the confusion and contributes to the nonsensical claims that Obamacare is a government takeover.

It must also be noted that the significant Obamacare tax breaks offered to the under-50-employee companies provide a substantial pro-business incentive to help reduce the number of uninsured in America.

The timid White House decision leaves Republicans like Gov. Rick Snyder, who continues his road trip pushing for the state Legislature to approve the ACA’s Medicaid expansion, flailing in the political winds. Michigan grassroots Republicans ask, Why is the governor pursuing this program when Obama is heading in the other direction?

Some cable TV anchormen are referring to the the administration’s decision as one that will “affect every working American.” What folly. Beyond the very limited impact on business, it’s important to note that most Americans already have insurance provided by their employer or the government (such as Medicare).
 
An estimated 2.5 percent of Americans – a portion of the uninsured – will purchase coverage on an individual basis on the upcoming Obamacare exchanges.

2.5 percent of individuals. Less than 1 percent of businesses. Could it be that Americans have been thoroughly misled about this program?

The administration and in particular the Treasury Department has had more than three years to adequately present a system for the business community to digest what Obamacare is all about. The implementation plan, we are told, is still not quite ready.

What have these guys been doing?

The White House also knew full well that certain businesses would try to manipulate the new system by putting their entire workforce on 30 hours per week to avoid the intended compliance. They knew that employers just below the 50-worker level would perversely be incentivized not to hire more workers. They knew that some companies would simply dodge the whole business of providing their employees with health care by choosing the Obamacare option of paying a fine.

And here is where the perception put forward by certain business organization lobbyists that the ACA is anti-business falls apart.

As Ezra Klein of The Washington Post points out, the average employer-sponsored insurance plan costs around $16,000. Compared to that, a $2,000-$3,000 penalty is a pittance. For all sorts of reasons, employers don’t seem to want to drop coverage, but if they did, this wouldn’t stop them.

Klein’s WaPO colleague, Sarah Kliff, wrote this: “The White House just swapped one political headache for another…By delaying a requirement that all ‘large’ employers provide health insurance, the Obama administration heads off the unseemly spectacle of companies vowing to cut jobs or workers' hours to avoid the costly mandate. But the late Tuesday action is not a free pass: It contributes to critics' claims that the White House does not have the ability to launch its biggest legislative accomplishment on schedule.”

Here’s Klein’s take on all of this:

“This was a huge win for business. They managed to scare Congress away from demanding that (employers) for the bulk of their employee’s health insurance. The employer mandate that ended up in Obamacare — like the one that ended up in Mitt Romney’s reforms — is more of a token penalty than a major policy. It brings in a bit of money, and boosts coverage on the margin, but it’s really there to satisfy demands that employers don’t get a totally free ride.

“… The specific employer mandate that ended up in Obamacare is not smartly constructed. … That’s why I was a fan of (Democratic Sen.) Ron Wyden and (Republican Sen.) Bob Bennet’s Healthy Americans Act, which converted employer health-care payments to wages, and then sent people to buy health insurance on their own.

“But in the near-term, we can’t have a health care system that both keeps employers at the center of the health-insurance market and asks nothing of them — even though that’s exactly what business wants, and what they seem ever closer to getting.”

I fully agree with Klein that the way out of this is to end the nation's antiquated employer-provided insurance system in favor of full participation by all workers in the exchanges, where they can shop for a policy that fits their needs and their personal finances.