This is what happens when Washington tries to dictate “one size fits all” regulations for a very complex national market, such as health care.
As Jillian Kay Melchior explains in National Review, the authors of Obamacare faced a conundrum: they wanted firms with 50 or more employees working 30 or more hours per week to offer health plans that meet certain minimum requirements — tough minimums at that. To “help” these companies, the authors created a generic acceptable plan as a safe harbor for businesses; meet these standards, and you face no penalties.
Trouble is, the safe-harbor plan turns out to be so expensive, hourly workers –the very people this bill was meant to help– find themselves stuck between the proverbial rock and a hard place:
Let’s look at this from the perspective of a low-income hourly worker within a certain unlucky bracket. This hypothetical employee earns more than $15,900 a year — which disqualifies him from Medicaid — but still struggles to make ends meet.
If his employer goes with the minimum, safe-harbor plan, he might face no good options.
He could take the employer’s plan — but if it’s a safe-harbor plan, it would cost, at minimum, $1,080 a year. And that’s before the deductible is even factored in. For someone who earns $28,725 a year, falling at 250 percent of the poverty level, these costs are sizeable.
Option two: He could shop around on the health exchange for an alternative. But because his employer provides a sanctioned plan, he’s disqualified from any subsidy he might have received to help offset costs. Even a very basic plan would cost up to $2,316 a year in premiums alone.
Option three: Forgo insurance altogether and pay the steadily increasing penalty to the federal government. In 2014, for an individual, that’s $95 for the year or 1 percent of household income, whichever is greater. But by 2016, it will rise to either $695 or 2.5 percent of household income. And that’s not even factoring in whether the worker has kids. In that case, he could face an annual penalty of $2,085 or more by 2016.
Prior to Obamacare, hourly employers could offer relatively inexpensive limited-coverage plans. No catastrophic coverage, but there was no deductible and the rates were affordable. Now, under the new, wonderful, UnicornCare regime, those plans are eliminated, and the hourly worker gets his choice from among three expensive ways to get the shaft. Rather than let states and regions find solutions tailored to their needs, rather than let market forces create the match between need and offering, the Democratic Party (1) decided it could make the economy obey. King Canute shakes his head in sadness.
Memo to all the hourly wage-earners out there who voted for Obama and the Democrats — you’re welcome.
(1) Yes, just the Democrats. Rammed down our throats without a single Republican vote, the Democrats own this monstrosity.
(Crossposted at Sister Toldjah)