Obamacare poses political problem

Obamacare poses political problem

President Obama's Affordable Care Act is having its intended effect — but that's the problem.

There is mixed news these days on the Obamacare front, where administration officials tout small advances, minimize setbacks and do their level best to avoid any negative political fallout by making unilateral changes in the law.

The good news for President Barack Obama is that, according to administration figures, nearly 3.3 million Americans have signed up for coverage under the Affordable Care Act. That's a substantial improvement from the initial numbers, which were low because of the problem-ridden Obamacare website consumers were required to use. Although the numbers have increased, the 3.3 million sign-up figure is still more than 1.1 million people short of where the administration hoped it would be — 4.4 million — by the end of January.

Unfortunately, the administration continues to be vague about what those numbers represent. Federal officials won't reveal how many of those who have signed up have actually paid for their new coverage.

In the real world, a transaction is not complete until payment is made. Under Obamacare, sign-ups are considered final — at least until they are not final.

As for the demographics, the administration stated that 27 percent of those who signed up are between 18 and 34, the so-called young-healthies who will be paying higher-than-market rates for insurance to subsidize the lower-than-market rates paid by older, sicker enrollees.

Another key figure the administration disclosed is that 82 percent of enrollees qualify for taxpayer-subsidized rates. That number should be no great surprise; it's an iron rule of economics that people act in their own best financial interests. Those who receive discounted insurance because of a taxpayer subsidy have an obvious incentive to enroll. The subsidies are generous; a family of four earning up to $92,000 a year qualifies for this welfare assistance.

In that respect, Obamacare is working as intended, and the administration is pleased.

But in another key respect, the administration is displeased because Obamacare is working as intended.

Fearful of the political fallout from continuing implementation, President Obama announced this week that he's once again unilaterally delaying a key provision in his signature legislation. Obama is delaying until after the fall election the requirement that employers with 50 to 100 employees either provide employer coverage or pay fines.

Here's the rub. The health insurance is expensive while the government-imposed fines are comparatively inexpensive.

The Obama administration fears that small employers would dump insurance for their employees shortly before the scheduled fall deadline — right before Election Day — and create a political furor among those forced to shop for more expensive, less complete coverage on the Obamacare exchanges.

The same thing happened last year with millions of insureds who found their individual policies summarily canceled because those policies did not meet Obamacare mandates. The administration fears that small-group employees who lose their employer coverage will rush to the polls in November in search of vengeance against congressional Democrats who enthusiastically passed this legislation.

President Obama masterfully minimized the consequences of his delay, telling reporters that the change is "smoothing out the transition" for medium-sized employers.

But it's not the transition that is the problem. It's a relatively easy decision for private employers — continue to insure their employers or tell them to purchase health coverage from the Obamacare marketplace.

The problem is the consequences of that transition — personal for employees, political for Obama. From his perspective, it's better to have people angry after the election rather than before.

One way or the other, however, the transition is coming. Obamacare is working as intended, and the president is determined to see it through to its ultimate conclusion.

The president hinted at his end game this week when he told reporters that "I don't think that an employer-based system is going to be or should be replaced any time soon" by a government-run system.

But he appears determined to end it, if not on his watch then certainly on the watch of his successor. If so, Obamacare will be a smashing success.

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Sid Saltfork wrote on February 14, 2014 at 3:02 pm

The problem of companies hiring less than 40 hour per week employees to avoid paying group insurance was created before any national health care program.  The one, and only plan which is needing improvement was passed by Congress, and upheld by the Supreme Court.  What alternative plans were put forward by those opposing the current plan? 

The problem of health insurance coverage has not been addressed by those opposing the current plan.  Offer an alternative.  Either create a new plan, or tweak the current plan because the problem still exists. 

In a time of growing income disparity, high corporate profits, and growing resentment toward the top 1 to 5 percenters; something needs to be cooperatively created.  The problem is not going away.  Statements by the top CEOs telling working Americans to quit whining, and that they have it good compared to Third World countries demonstrates the greed.  Try telling people who have slipped from middle class to working poor that their families, and themselves are not worthy of health care so high profits can be maintained; and see what happens later.

Who do those opposing health care insurance coverage represent?  Do they represent the working citizens, or the top percenters?  Real working people, and their families need some hope in the American Dream rather than despair, and frustration.  How much lobby money has been distributed to the defenders of greed in Congress?  Playing politics for money will lead to something that will benefit none.  Those in the opposition to health care insurance for working Americans should either put up a plan, or work cooperatively to tweak the current plan.  Running of a ticket of criticism rather than problem solving will not win elections.

EdRyan wrote on February 15, 2014 at 7:02 am

Get rid of employer provided health insurance in the US.  A primary reason business in the US can't compete with foreign producers is that foreign producers do not pay huge employee health care costs.

Small employers simply can't handle the high cost of health insurance for employees and will avoid it at all costs and are really motivated to do so when those employees can obtain their own insurance on exchanges with large government subsidies.  The subsidies for small employers on the other hand are small, limited to a couple of years, involve some complex tax calculations, and come long after the the insurance bill is paid and in the form of a tax credit.

We need to rethink how this social safety net in the US works and we must get it all off the backs of employers if we want to revitalize the US economy in places other than San Jose, NYC, and DC.

Sid Saltfork wrote on February 15, 2014 at 11:02 am

Glad to see that you support the national Affordable Care Act.  Subsidies for the workers, and no money required from their employers sounds great.  Where is the money for the subsidies going to come from?  Without the money the problem still exists, and will continue to grow.  I respect your view.  I agree with you on the "small employers"; but what is "small"?  Only the details need to be worked out.     

EdRyan wrote on February 15, 2014 at 7:02 pm

The ACA is really quite the Rube Goldberg mess.  To restore the "American Dream" workers have to be competitive in the world market as long as there is such a thing.  The social safety net needs to be shifted from employers to society at large which will require a tax code that taxes passive income at the same rates as wage income.  Can any of this be done?  Probably not without some crisis equal to the Great Depression.

Sid Saltfork wrote on February 15, 2014 at 9:02 pm

It is a mess.  I agree.  I have no problems with taxing "passive income".  My pension is taxed by IRS.  Social Security is taxed.  The list of the other items defined as "passive income" should be taxed.  What is defined as "passive income" is mostly already taxed such as lottery winnings.  The tax code needs to be reformed.  The losers would be those who shelter earnings; and that is not the majority of Americans.  Tax every dime before it is sheltered.  That would include dividends, and rent to landlords which are defined as "passive income".  Stop the subsidies to businesses including agriculture.  Tax income derived from foreign investments.  Eliminate business write offs like "ink and paper", and other tax breaks for businesses.  Make every dime earned taxable just like wages.  I agree with you.

There is a crisis coming; and the pain will have to be shared by all of us, not just some of us, if it is to be stopped.  It will require people working cooperatively together rather than reacting negatively based on two corrupt parties' rhetoric.