What Fresh Hell Is This?

July 5, 2013

The Braintrust Gets It Wrong. Again.

I hope everyone had a good fourth.

But there's still work to be done, still misinformation to be corrected, still Tribune-Review op-eds to be debunked.

Like this one, today:
The Obama administration just jumped out of the frying pan and into the fire with its abrupt Tuesday decision to delay a signature provision of ObamaCare.

Not only is the move to delay, until 2015, implementation of a mandate that larger employers (of 50 or more workers) provide health care insurance for their employees or face a $2,000 fine for each nakedly political — it postpones an onerous diktat with backdraft political implications until after the 2014 midterm elections — the administration's arbitrary decision to flout the law is patently illegal. [Emphases added.]
Arbitrary?  Well, let's see about that.  Here's how the Treasury Department explains the "abrupt" and "arbitrary" decision:
Over the past several months, the Administration has been engaging in a dialogue with businesses - many of which already provide health coverage for their workers - about the new employer and insurer reporting requirements under the Affordable Care Act (ACA). We have heard concerns about the complexity of the requirements and the need for more time to implement them effectively. We recognize that the vast majority of businesses that will need to do this reporting already provide health insurance to their workers, and we want to make sure it is easy for others to do so. We have listened to your feedback. And we are taking action.

The Administration is announcing that it will provide an additional year before the ACA mandatory employer and insurer reporting requirements begin. This is designed to meet two goals. First, it will allow us to consider ways to simplify the new reporting requirements consistent with the law. Second, it will provide time to adapt health coverage and reporting systems while employers are moving toward making health coverage affordable and accessible for their employees. Within the next week, we will publish formal guidance describing this transition. Just like the Administration’s effort to turn the initial 21-page application for health insurance into a three-page application, we are working hard to adapt and to be flexible about reporting requirements as we implement the law.
So not so abrupt or arbitrary, huh?  But take a look at the why of the delay: to give businesses more time to meet the requirements of the law.

And what does business have to say about this delay?  From the New York Times:
Employer groups were quick to applaud the delay. At the U.S. Chamber of Commerce, which has strongly opposed the law, Randy Johnson, senior vice president for labor, immigration and employee benefits, said in a statement, “The administration has finally recognized the obvious — employers need more time and clarification of the rules of the road before implementing the employer mandate.”

E. Neil Trautwein, a vice president of the National Retail Federation, said the delay “will provide employers and businesses more time to update their health care coverage without threat of arbitrary punishment.”
And why is there a need for a delay?  This from the Washington Post:
The decision comes as a result of years of bumps and setbacks for the overhaul, including legal challenges and political opposition that have hampered its implementation. Last summer, the Supreme Court upheld the law but struck down a mandatory expansion of Medicaid. State officials and businesses held off changing their policies through the 2012 presidential campaign because Obama’s GOP opponent, Mitt Romney, had promised to repeal the law.
Basically, business has been delaying implementing the policies hoping that either the Supreme Court overturns the law or Romney killed it.  In case you missed it, neither happened.

And so now they're running short of time and the Administration just gave them another year.

And yet to Scaife's braintrust, it's an "abrupt" and "arbitrary" decision designed to help out in the 2014 midterms.

But will it have much of an effect?  According to Brian Beutler at Talkingpointsmemo, not so much:
The provision in question — the so-called “employer mandate” — is intended to entice large employers to provide insurance to their full-time employees, and create a disincentive for large employers who might be tempted to unload their health care costs on to taxpayers by nudging their employees into Obamacare’s subsidized insurance exchanges.

Crucially, though, experts note that these incentives are fairly trivial in the grand scheme of employer sponsored insurance, and they don’t expect that the temporary delay of this particular penalty will have major consequences for the insurance market under Obamacare.

“[T]here is very little in the ACA that changes the incentives facing employers that already offer coverage to their workers, and fully 96 percent of employers with 50 or more workers already offer today,” write Linda J. Blumberg, John Holahan, and Judy Feder of the Urban Institute. “Competition for labor, the fact that most employees get greater value from the tax exclusion for employer sponsored insurance than they would from exchange-based subsidies, and the introduction of a requirement for individuals to obtain coverage or pay a penalty themselves, are the major factors that will keep the lion’s share of employers continuing to do just what they do today with no requirements in place to do so.”

In other words, even in absence of Obamacare’s $2000-a-head penalty, employers still have very real incentives to offer their employees health benefits. And if the delay will only have a modest impact on the insurance market, then it should also have a modest impact on the law’s fiscal consequences.
Funny how much real reality differs from the false reality projected by the Tribune-Review editorial board - you know, once someone bothers to introduce facts to the discussion.

1 comment:

dmarks said...

The provisions being delayed are very repugnant and hostile to workers. Specifically, they fine companies for hiring people more than 30 hours a week, and encourage companies with more than 49 employees to fire people to get down to a level (or, if 49/below, to never hire more people).

But this is a good step. Hopefully, this mandate will be delayed even more years... and a delay for the personal mandate is a must too.