It seems that every week brings news of another major employer terminating its workers’ health benefits to avoid complying with the terms of the Affordable Care Act, known as Obamacare.
The latest? Specialty grocery store Trader Joe’s and SeaWorld, which are reportedly cutting benefits and hours to part-time workers and letting them seek out health insurance on their own.
What do such stories mean for the future of Obamacare? Joel Mathis and Ben Boychuk, the Red-Blue America columnists, debate.
MATHIS: Well, let’s not panic.
Trader Joe’s isn’t exactly making a decision to leave its part-time workers without health coverage — the company has merely decided that, in the age of Obamacare, the government can do a better job of providing that benefit. Instead of providing insurance, the grocer reportedly will write its part-time employees a check for $500 to pay for insurance.
Combine that $500 with tax subsidies available to low-wage workers under the Affordable Care Act, Trader Joe’s told part-time workers in a memo, and “many of you should be able to obtain health care coverage at very little if any net cost to you.”
In other words: The company is shifting the cost burden of part-time employee health care to taxpayers and, to a lesser extent, the employees themselves.
True, other big companies are cutting back on worker hours to avoid Obamacare’s mandate that they provide health insurance to full-time employees. That’s highly unfortunate.
But it’s also a sign of how much liberals compromised their vision of universal health care to get a bill passed. Obamacare’s unwieldy system of mandates and private insurance was an attempt to neutralize opposition and borrow conservative ideas to get the job done. (It can’t be emphasized enough: The vision of what Obamacare became originated at the right-wing Heritage Foundation and was put into practice by Mitt Romney in Massachusetts.)
Some of us still fantasize about creating a Canadian-style single-payer system — one that, while also imperfect, has been shown to generate generally better health outcomes for cheaper costs than in the United States. But that idea is going nowhere for now. If you look at Obamacare these days and tell yourself “there’s gotta be a better way,” you’re probably right. But improving it probably involves stripping out conservative ideas and free-market compromises.
BOYCHUK: Social scientists often like to say the plural of “anecdote” isn’t “data.” Just because a few employers like Trader Joe’s and SeaWorld have cut workers’ hours and benefits, that doesn’t necessarily mean the law is hurting people or distorting the labor market.
“A few”? Sorry, that should be a few hundred employers. According to one recent survey of about 600 small-business owners, four in 10 said they’ve put off hiring, while one in five have trimmed hours and another 20 percent have cut their payroll.
But what’s a few hundred employers in a country with a labor force of 154 million? A sign of things to come, that’s what. Another survey found that 20 percent of employers in retail and hospitality planned to cut hours in response to the law. A third survey found 30 percent of employers planned to drop health insurance altogether after 2014.
The Obama administration’s decision to delay imposing the law’s employer mandate until after the 2014 elections is another bad sign. As my Manhattan Institute colleague Avik Roy points out at Forbes, the delay means “more people will want to enroll in Obamacare’s subsidized insurance exchanges. Every year, fewer and fewer employers offer health coverage; given one more year to restructure their workforces, this process could accelerate.”
When employers react to the law’s mandates in a rational, self-interested way, liberals complain that employers are heartless. They never blame the authors of the bad policy.
It’s no wonder that some cynical observers suggest that Obamacare was never meant to succeed. The regulatory complexity of the law would cause it to collapse under its own weight, and Americans would happily embrace a single-payer system along Canadian lines.
On the contrary, Obamacare offers a glimpse of what a single-payer system would look like in the United States: confusing, expensive, corrosive of choice and destructive of freedom. Better to scrap the whole thing and start again.
Reach Ben Boychuk at firstname.lastname@example.org, Joel Mathis at email@example.com.