Karma time: Unions figure out Obamacare is a nightmare

Feb. 5, 2013

By Chris Reed

As I noted in a CalWatchdog post last week, the California media are covering the state government’s aggressive attempts to lead the nation in the early implemenation of Obamacare without bringing up its immense fundamental problems.

“Beginning next Jan. 1, most companies with at least 50 full-time employees have to offer health insurance. But if they don’t, the fine is a pittance -– $2,000 per employee per year –- compared with the cost of providing health insurance. This creates a gigantic incentive for businesses to drop health coverage and push their employees toward getting insurance though government-run exchanges set up by Obamacare. If a struggling company could swiftly become a prosperous one by offloading 70 percent or more of the cost of providing health coverage, many thousands are going to do it. Some might face shareholder suits if they don’t.

“Also beginning next January, individuals without employer-provided health insurance will face fines under an income-based formula that mandates a penalty of less than $1,000 for those making under $40,000 a year. That $40,000 is significantly higher than the median household income for adults younger than 35, a subset that’s much healthier than older adults. All adults will have an incentive to only buy health insurance when they get sick; under Obamacare, they can no longer be rejected for pre-existing conditions. But these young, healthy adults will have a gigantic incentive.”

Now the fact that this law is the worst piece of legislation since the Indiana legislature voted unanimously for a bill to change the numerical value of pi is beginning to sink in with a Democratic interest group that was one of its hugest supporters: labor unions. This is karma on many fronts, and vindication for the many who said the law was larded with regulations that would have unanticipated negative implications.

It will ‘make union workers less competitive’

This is from the Wall Street Journal:

“Union leaders say many of the law’s requirements will drive up the costs for their health-care plans and make unionized workers less competitive. Among other things, the law eliminates the caps on medical benefits and prescription drugs used as cost-containment measures in many health-care plans. It also allows children to stay on their parents’ plans until they turn 26.

“To offset that, the nation’s largest labor groups want their lower-paid members to be able to get federal insurance subsidies while remaining on their plans. In the law, these subsidies were designed only for low-income workers without employer coverage as a way to help them buy private insurance. …

“Contacted for this article, Obama administration officials said the issue is subject to regulations still being written … .

“Top officers at the International Brotherhood of Teamsters, the AFL-CIO and other large labor groups plan to keep pressing the Obama administration to expand the federal subsidies to these jointly run plans, warning that unionized employers may otherwise drop coverage. A handful of unions say they already have examined whether it makes sense to shift workers off their current plans and onto private coverage subsidized by the government. But dropping insurance altogether would undermine a central point of joining a union, labor leaders say. …

“The Teamsters’ Mr. Hall said his union has no plans to eliminate workers’ insurance. Instead, he worries employers will have an incentive to drop coverage in collective bargaining if they can’t tap the subsidies.”

Some of the policies that unions object to may actually be defensible for forcing an acknowledgment of how the heavy cost of health care escapes compensation taxation, which encourages higher spending on health care. But the larger gripe of unions, the idea that they had no idea how sweeping this would be and how it would rock their world, is hilarious in context. Obamacare’s critics weren’t just ideologues. They were serious policy people. And on nearly every front, their warnings are being validated. But supporters aren’t being held to account for their willing blindness.

When will the ideologues who pretend to be neutral Sacramento journalists point this out?

The over-under is May 1, 2018.

When George Skelton sets the agenda, the real world is ignored.