• Quote: The effect of the employer mandate is likely to be small, and not all bad

    The irony of this discussion is that some of the biggest beneficiaries from the ACA are the same low-wage, uninsured workers whose interests Republicans purport to defend when they complain about the law’s effects on work hours.

    Under Obamacare, these workers get real benefits. Some will start getting health insurance through work because the employer mandate provision induces their employers to start offering coverage. Others work for firms that will pay the penalty instead of offering coverage — those workers will get new access to heavily subsidized insurance through Obamacare’s exchanges (at least, once HealthCare.gov starts working properly.)

    Those subsidies will often be quite large. A single parent with two dependent children working full time at $15 per hour with no health insurance will be able to get a silver-level exchange plan for just $1,250 per year under Obamacare. Even uninsured employees whose hours are modestly cut (say from 32 hours a week to 28) may come out ahead because of Obamacare’s insurance subsidies.

    Josh Barro, Business Insider


    • It may not be on the whole bad but there are definitely situations where it can and will be bad.
      Consider that many employers will be offering bronze level plans to employees that have high out-of-pocket deductibles with no company contribution for the employee’s spouse or children. This coverage is not beneficial to the employee since they are out-of-pocket up to the unreasonably high deductible, yet the fact the company offered them insurance invalidates them for subsidies for better plans on the exchange. Even worse is that insurers often forbid providers from offering charity discounts to patient cost-sharing portions because the plan assumes cost-sharing will impact usage and offering discounts blunts this mechanism.
      End result is an individual paying premiums for a health plan that does not really benefit them and costs them more than if they could negotiate directly with providers under existing charity care policies.

      • Those are minor difficulties that would normally be addressed by passing some small reforms that both parties agree with.

        • To David M.

          “Those are minor difficulties that would normally be addressed by passing some small reforms that both parties agree with.”

          Sorry, the reason we got the law we got was because both parties could not agree, and one pushed ahead even though they knew they had lost their super-majority in the Senate. You expect reason and agreement now, where there never was any to begin with? You expect reason and agreement now where the then-majority in both houses basically decided that we should pass what was, even-then, an obviously flawed bill? Or, did you believe that the Democrats would always control both houses of Congresses with a super majority in the Senate and the White House? It was clear that then, and now, that the D’s do not believe in reforms both parties can agree upon – as they pursue strategies to return control of the house to D’s in 2014.

          Sorry, the only reason this is not an even worse debacle is because they have implemented a dramatic number of fixes and delays and transition rules that are CLEARLY INCONSISTENT with the statute.

          Finally, let me point out that it is October 25, 2013. The issues arising today were in the final bill signed into law on March 23, 2013 . That is 3 1/2 years. Isn’t it obvious by now that there is nothing the parties agree upon when it comes to this issue – other than the 2011 agreement to remove the requirement to issue 1099’s to those with $600+ a year in income, eliminating the even more unworkable CLASS act, and deleting the unworkable stupidity that was the voucher program?

          Where else is there agreement on adjustments to this law? We can’t even get agreement on changes the Administration unilaterally imposed that were clearly in conflict with the statute – the delay in the employer mandate, the delay in the SHOP exchanges, etc.

          • Since when does the constitution say we need a super-majority to pass laws? Those are just Republican rules.

            • I think, perhaps, when Obama and the D’s proposed the Heritage Foundation reform plan, they thought they were proposing something that both sides could agree to.

              This is not and never has been about the reform model.

    • Subterfuge by Barro. The issue is whether or not the law reduces the work hours of workers and thus greatly reduces their discretionary expenditures. Nowhere in the three paragraphs does Barro show that it does or doesn’t so the conclusion drawn is premature. I note Barro doesn’t ask the worker if he feels that he is coming out ahead. He just draws that conclusion. I don’t think a lot will believe they are coming out ahead when most of their discretionary money disappears and they find that their limited use of health care will not be paid for because the deductible will far exceed what they reasonably expect to spend.

    • I am sure that Professor Frakt has read the law so I expect something better than this from him.

      Employers do not “choose” to pay the penalty. Employers are “assessed” the penalty when an employee purchases a policy on an exchange and receives a credit. The credit triggers the penalty. This is an important distinction. If no employees obtain a credit then there is no penalty.

      The employee receives the credit if coverage offered by the employer does not meet the double criteria of “essential and affordable.” Affordable is the tricky part as what is affordable is determined not by the absolute price of the coverage offered by the employer but by the employees income.

      This will have unusual consequences. Low wage employees may blow out the affordability criteria, even if the coverage offered is essential. In response, an employer can provide a skimpier plan, raise the employee’s wages or lay off the employee to adjust for the affordability criterion.

    • Say that a part timer was working 35 hours a week a year ago and had no health insurance.

      Now they are working 29 hours a week. Their income is down by 16%.

      When the exchanges open for real, this group may be so weighed down by bills that they will choose not to enroll.

      The solution of course would have been this:

      -Raise the payroll tax on all employers

      -An employer who does pay for health insurance could deduct what they pay, and so owe no tax.

      – Restaurants et all would be stuck with the higher payroll tax.

      No distinctions of hours worked at all! No enforcement needed.
      Employers just have to prove that they paid for employee’s insurance.

      Bob Hertz, The Health Care Crusade

    • The employer mandate is basically a scam to hide the tax and show the benefit, I do not see how any knowledgeable non-politician can support it. (Think tax incidence.)

      In short run the some the employers will pay and in the the long run the employees will pay. So if you want to give a benefit to low income employees what is the justification for not taxing the general population but rather in the short run employers who do not currently pay health insurance and in the long run employees who will be ignorant of the tax?

      It is a rotten scam perpetrated on the rationally ignorant tax payer.

    • Obamacare will be a boon to independent contractors and consultants, who will find it so easy to compete with Obamacare-saddled employers. I already earn an hourly rate that’s almost double what a “captive” employee earns, especially if he’s single, young, childfree and male and totally screwed by SS, Medicare, Medicaid, child-care credits for breeders and now Obamacare.