Andrew Puzder is CEO of CKE Restaurants, which runs the Hardee’s and Carl Jr’s chains. He says of his employees:
Only about 6% of crew-level employees and 60% of general managers sign up for health-insurance coverage.
These low participation rates surprised me. So over the past couple of years I have asked CKE employees what motivated their decisions. Our crew-level workers tend to be younger, and perhaps unsurprisingly some told me they were unconcerned about illness or injury. Others already had insurance through a spouse or parent. A significant number said they declined coverage because they could get medical treatment “for free at the emergency room.” Among those who had signed up, many said it was because they were concerned about developing a medical condition (perhaps due to a family history of illness), and then being unable to get affordable coverage due to this pre-existing condition.
These kinds of responses are why I question the ACA’s viability.
Precisely. If O-Care can’t get young and healthy signing up for $2,500-or $3,000-a-year health insurance plans, then rates are going to skyrocket for the older and sicker.
I remember in my twenties, I didn’t usually bother to carry health insurance, except for a few years when I had a high-deductible catastrophic plan — the kind that ObamaCare has outlawed for anyone over 29. But that was enough for me, since in my 20s my health care needs, no joke, never exceeded a trips to the dentist, a couple bottles of aspirin, and a new pair of glasses each year. My friends were much the same way. Even now, after two bouts with Grave’s Disease, my medical expenses don’t justify a Cadillac plan.
But let’s go back to Puzder:
The ACA’s incentive for young workers to pay for coverage is a penalty (or tax) on uninsured individuals. The penalty in 2014 is $95 or 1% of household income, whichever is greater. It increases in 2016 to $695 or 2.5% of household income, whichever is greater.
A young kid in good health, making about $20,000 a year, will face the choice of buying a gold-plated insurance plan for 10-15% of his pre-tax income — or pay a “tax” of $695. Either way, he’s unlikely to buy much health care, so it makes a lot more economic sense to pay the penalty. The emergency room is still there, and pre-existing conditions will be covered.
Theoretically, wouldn’t it be better to get people paying some money for some coverage, rather than this perverse incentive to game the new system? I have a couple thoughts on that.
Economically, basic coverage simply doesn’t funnel enough money away from the young and healthy (and comparatively poorer) to pay for the subsidies for the older and sicker (and wealthier). That is to say, the subsidies require a bigger fleece.
But I believe there’s another reason, a political one.
Have you seen what even the most basic “bronze” plan is required to cover at “no cost?” Mammograms, vaccinations, cholesterol checks, and more. Also squeezed into your mandatory coverage:
•Ambulatory patient services, such as doctor’s visits and outpatient services
•Maternity and newborn care
•Mental health and substance use disorder services, including behavioral health treatment
•Rehabilitative and habilitative services and devices
•Preventive and wellness services and chronic disease management
•Pediatric services, including oral and vision care
Plus birth control, assuming that holds up to court challenges.
We’ll have young people paying for ambulatory services, gay men paying for maternity and newborn care, Scientologists paying for psychiatry, the healthy paying for chronic illness, infertile couples paying for pediatric services… well, you get the idea.
You don’t want or need all of that covered? Tough. ObamaCare hath spoken.
But larding up even the most basic plan with all this pork was just that: Pork. Obama and Pelosi and Reid were able to gin up medical professional support for the bill by promising more coverage for more services. Maybe I would never have seen a shrink before, but hey, now it’s so cheap!
What were once an indulgences are now benefits.
So on top of young people’s non-compliance, there’s one more way ObamaCare is set to explode costs.
And what is that drumbeat I hear in the distance? Ah, yes — the call for single-payer.