You’d think it’s another one of those right-wing, Obamacare-hating diatribes, the study that recently crossed our desk titled: “Why Not Just Eliminate the Employer Mandate?”
That’s a reference to a pillar of the Affordable Care Act, the requirement that companies with 50 or more employees provide health insurance coverage or pay a substantial fine.
The mandate has been a favorite target of conservative critics who argue that it puts a job-killing burden on business. The Obama administration has refused to recognize this, but it has temporarily suspended the mandate for many companies.
This study, though, didn’t come from the Heritage Foundation or some think tank funded by the oh-so-dreaded Koch brothers.
It came from three researchers at the Urban Institute’s Health Policy Center. Their research was supported by the Robert Wood Johnson Foundation.
They found that “eliminating the employer mandate will not reduce insurance coverage significantly, contrary to its supporters’ expectations. Eliminating it will remove labor market distortions that have troubled employer groups and which would harm some workers.”
The researchers estimate that 500,000 fewer individuals would have employer-provided health coverage if the mandate were repealed, but about 300,000 of them would gain coverage via the Obamacare insurance exchanges or Medicaid. Some 161 million workers now get insurance through their employer.
So the impact on health care would be quite modest. Eliminating the mandate, though, would remove incentives to shed workers or reduce wages. It might even develop some fans for the law.
“Eliminating the employer responsibility requirements should substantially diminish employer opposition to the ACA. In fact, without that burden, employers may play more of a role promoting the expansion of coverage under the law.”
Democrats, are you listening?
Across America, businesses are grappling with the question of how to handle the impending mandate to provide coverage or pay penalties. Many business owners may cut jobs and reduce employees’ hours to avoid providing costly coverage. Others may pay relatively small penalties and save big money by shifting workers, willingly or not, into online marketplace exchanges.
The business mandate has been delayed twice for employers with 50 to 99 full-time workers. Those employers don’t have to offer coverage or pay a penalty until 2016. Larger employers still must provide coverage starting next year, but they now must offer coverage to fewer employees than was initially dictated under the law.
The ever-shifting rules and delays have left employers guessing. Washington should let businesses decide how and if to extend coverage to their employees, as they do with other benefits.
Many Democrats recognize that the Affordable Care Act is still not popular with the public and it has vast flaws that should be fixed. Consumers and insurers need flexibility to buy and sell the coverage people want and can afford, not the coverage that federal bureaucrats dictate as best.
Businesses are now planning for their 2015 health insurance coverage. Many will see sharp premium hikes. Those with younger, healthier work forces may confront even larger price spikes, because the law limits how much more insurers can charge groups of older, sicker people versus healthier groups.
The business mandate isn’t the only issue that will affect American workers. Eventually – and this could happen quickly – many American businesses may drop coverage and shift their employees into Obamacare online marketplaces. The research firm S&P Capital IQ predicts that by 2020, about nine in 10 American workers who now receive health insurance through an employer will be shifted to government exchanges. That would be an astonishingly rapid meltdown of the employer-based system.
S&P estimates that American businesses could reap hundreds of billions in savings by shifting workers into exchanges. “The incentive to move employees into an exchange is irresistible,” S&P managing director Michael Thompson tells us.
We don’t know how accurate that prediction will prove to be. But we do know that many employees aren’t eager to grapple with glitch-riddled online exchanges and federal bureaucrats dictating what coverage they can and cannot have.
Many American workers like the range of choices offered via their employer. They like their doctors and hospitals and want to keep them. They need health care plans suited to their needs, not ones flung down from the heavens by Obamacarians.
All the more reason that the Obamacare overhaul should begin now.