Mid-Atlantic Employers Cut Health Benefits, Obamacare to Blame
Yesterday, we discussed the New York Fed’s survey of employers in its region, in which they blamed Obamacare for raising health insurance premiums 10 percent.
The Federal Reserve Bank of Philadelphia has just released a similar survey, with similar results. Because of Obamacare:
- 18.2 percent of employers reported that they cut workers, versus 3.0 percent who hired more;
- 18.2 percent reported that the proportion of part-time workers was higher, versus 1.5 percent who lowered the proportion of part-timers;
- 28.8 percent reported they increased prices, versus zero who cut them;
- 41.2 percent reported the range of medical coverage is lower, versus 2.9 percent who increased coverage; and
- 26.5 percent reported that the size and breadth of their provider network was lower, versus zero who broadened their network.
These are not stories made up by Tea Party fanatics. This is real evidence that Obamacare is harming our prosperity.
Incentives matter!
I’ve told audiences when I speak at conferences, the employer mandate is a tax on labor that will inhibit job creation. People often look at me like I’m from Mars when I say that. But there is plenty of evidence that it’s true.
I will not for one minute defend the ACA, but I still have to ask:
has one firm in the entire US been subject to the employer mandate yet?
I thought it was delayed until 2015, but I may be wrong.
And:
If a firm with well under 50 employees goes to part timers, maybe they are just seeing an opportunity to cut costs. The ACA forces them to do nothing.
Still:
If the mandate is indeed causing these bad effects, what does this say about mandates?
I know what I think it says.
It says that government regs are no substitute for real unions. Real unions have been getting health insurance for workers for 60 years. Because if an employer resisted, a strong union shut them down.
Mandates do nothing of the kind. Mandates let firms wriggle out and shaft their least valuable workers.
I am with Bob, except when he goes off the deep end about over-priced employer-based Union health insurance which can cost $35,000 per year, per family.
Each and everyone of those stats is simply a result of the ongoing agonizing death of employer-based health insurance. Those stats would have happened with or without the ACA.
John, my wife told me about a nasty EOB this morning. She said, “Poor Ben, our oldest son, I got an EOB and he owes an additional $2,300 because of out-of-network charges.” The surgery happened in March and it was a life and death situation and things were moving very fast. Ben didn’t call 911 he called his Mom, smart move. We were so afraid we were going to lose him. An ambulance would have taken him to the closest hospital but we drove an hour and picked up Ben and his dog and drove back an hour to the best hospital for him. Somebody had to take Ben into the ER and somebody had to watch the dog. I asked Mike, the first tax-free MSA from 7-Eleven from 1997, now a close friend that knows both Pam and me, who do you think went into the ER with Ben? Mike said, Oh, I’m sure you were on doggy duty.”
Here is the problem. The assistant surgeon’s charges were $35,000!! TIME was arguing that the assistant surgeon’s fee should be included with the primary surgeon’s fee. TIME ordered medical records and in fact, it has been determined, this particular assistant was required. Because Ben is on TIME’s PPO and this charge is out-of-network – Ben owes $2,300 more than his deductible.
The difference between Golden Rule(UHC) and TIME is pretty simple using this example. UHC and TIME are both coming to the Florida exchange in November to bring added competition to the evil MONOPOLY Blue Cross of Florida Inc. Both of these for-profit companies will be less expensive than the non-profit evil Blues. UHC’s HMO will be slightly less than TIME’s PPO and BCBS’s EPO will be the most expensive. It is assumed that the consumers will flock to the lowest price, because they don’t know anything, and go with UHC’s HMO. The problem with the UHC’s HMO is if you go out of network the consumer gets squat, nothing. In Ben’s example he would have owed $35,000 with UHC instead of his penalty of $2,300 with TIME.
So TIME might be in trouble over time because those people who are sick and experience out-of-network charges with UHC can now just wait for Open Enrollment and switch to TIME to pay all of their medical bills. Sick people know a whole lot more about health insurance than healthy people because of experience knowledge.
Like Pam says, “Ben was under the knife, he was not conscious, he could not choose the assistant surgeon when it was determined he was needed.”
Thanks Ron. I am not defending the structure of union health plans……although I suspect that when a union plan costs $35,000, it is because a lot of retirees and pre-retirees are kept on the plan into old age. I saw that happen when I was on a school board.
Anyways, what I was getting at is this:
A union would not let the employer just toss people onto part time status to avoid buying health insurance or paying an ACA fine. If the employer shoved someone down from 35 hours a week down to 29 hours a week to avoid an ACA headcount, a union would demand that the affected amployees be paid about 15% more per hour.
The drafters of the ACA wanted to nudge, penalize, and incentivize employers to cover more people. But when employers discovered loopholes to avoid extra coverage, the government was helpless.
Finding loopholes and then closing them happens all the time in union shops, it is not news. The sad part to me about the fate of part timers under the ACA is that the employees are so darned powerless.
Bob, you are so much nicer than me. You believe that the ACA was to get more peopled covered and I don’t. But you are correct that the ACA has not started yet with requiring employers to sell insurance to employees. So, the reason people must go part-time is because of employer-based health insurance with or without the ACA.
Here is a link to the cost at Wayne State University(WSU) as an example. The full-time employees are paying $1,400/month and WSU is paying $980/month:
http://hr.wayne.edu/tcw/health-welfare/2014-pa54-rates.pdf
I feel sorry for both the full-time employees for being charged so much and I feel sorry for the part-time employees because they can’t work and earn a living. This is all because of employer-based health insurance and not the ACA. The ACA law prohibits the full-time employee from getting coverage on the exchange with tax credits. But they could blow off the WSU plan and go to the free and open market and get coverage for so much less. An example is a 30-year-old couple and 2 children in Wayne County, MI can get the HSA Bronze plan from Humana for $463.74/month without tax credits. Which is more affordable $463.74/month or the employee’s share of $1,400/month from WSU? Of course WSU kicks in an additional $980/month and sends $2,400/month to (NON-PROFIT)Blue Cross of Michigan, the local yocal.
The part-timers may go to the exchange and get tax credits because WSU is not trying to sell them insurance. If the above family earned $50,000 (MAGI), part-time or full-time their credit is $340.22/month.
The part-timers can take the credit but the full-timers can’t. This is why those in the know realize that the end of employer-based health insurance is near. One big problem is participation requirements on WSU by Blue Cross. WSU must have a certain percentage of employees on their employer-based plan or the plan is terminated. Simple as that. When these employees figure out they don’t have to pay $1,400/month they will bid fond farewell to Blue Cross. Then the evil Fascist non-profit monster will be dead, AMEN.
What you are saying, Ron, or at least implying, is that if every person on the Wayne State plan were to buy individual coverage, then the total premium would be well under $2400 per family.
Both the Wayne State and new coverage is guaranteed issue. Both Wayne State and new coverage includes maternity benefits. Both Wayne State and new coverage have very high lifetime maximums.
So the question is, why is Wayne State coverage so expensive?
Here are a few possible answers:
a. Wayne State is covering 70 year olds
b. Wayne State has some cancer cases and transplant cases in progress, which a group insurer has to pick up.
c. The new rates for indvidual coverage are artificially low, and in time the individual premiums will be just as high as Wayne State current premiums.
Otherwise I don’t get it.
Bart, I have known about this forever. In 2000 we were running radio spots on Rush on WHO in Des Moines that said:
Wake Up! Don’t be lulled by propaganda. Propaganda says employer-based health insurance is less than individual insurance: Not True. Many counties are paying over $1,000 a month! – But many families can get MSA health insurance for less than $200. STOP WASTING OUR TAX DOLLARS!!
Here are more examples – all family coverages
St Petersburg,FL (City) paying $1,897/mo. The (County) is called Pinellas paying $1,629/mo
A 30/yr couple + 2 kids on the exchange HSA = $566/mo Humana!
______________________________________________________Volutia County FL paying $1,966(BC) exchange = $467Humana
Flagler County FL(Capitol) paying $1,614/mo(BC) exchange$619.50(BC)
[Miami-Dade County FL $3,243] Exchange $548/mo Coventry
East Longmeadow MA (City) $3,828/mo Exchange $738.33(NHP) (These guys make employees pay half or $1,914/mo)
http://ma-eastlongmeadow.civicplus.com/index.aspx?NID=585
Same thing is happening with all businesses in America.
Bart, not everybody is 70 – we are being scammed by crooks. How they control the media I have no idea.
Bart, funny, my partner just emailed me this from the New York Times. He trained this Zane guy, the goofball.
http://boss.blogs.nytimes.com/2014/08/25/a-business-owner-stands-by-zane-benefits-controversial-health-insurance-plan-for-now/?_php=true&_type=blogs&_php=true&_type=blogs&_r=1&boss.blogs.nytimes.com/2014/08/25/a-business-owner-stands-by-zane-benefits-controversial-health-insurance-plan-for-now/?_php=true&_type=blogs&_r=0
The employee was paying $2,000/mo but on the exchange $150/mo with tax credits. Group health plans BEWARE: NYT is talking about your high costs! GREAT
I recommend terminating group insurance and let the employees go to the exchange and get the HSA Bronze plan, with credits) and the employer make HSA deposits – too simple.
Everyone is going to figure this out soon.
Bart, I don’t recommend what Zane is trying to do.