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by
Rick Moran

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May 11, 2014 - 7:54 am

A new study prepared by the Urban Institute and the Robert Wood Johnson Foundation concludes that low wage workers would be most drastically affected by Obamacare’s employer mandate.

Washington Examiner:

“Employers with 50 or more workers not offering coverage pre-[Affordable Care Act] are the same employers that are highly likely to not offer in the future, therefore incurring the ACA’s penalties,” the study reads. “Because the nonoffering firms are much more likely to be firms dominated by low-wage workers … low-wage employees will bear the greatest brunt of the penalties imposed. Therefore, using employer penalties as a tool for financing reform tends to be a regressive approach.”

The arguments against eliminating the employer mandate while keeping the rest of Obamacare intact are that if employers aren’t required to provide coverage, then they’ll have a financial incentive to stop offering it and dump individuals on government-run exchanges or Medicaid. This would drive up the cost of Obamacare, and at the same time, the government would no longer be collecting penalty money from non-complying firms.

The study predicts that most employers would still maintain coverage even if the mandate is eliminated, and that 500,000, or 0.3 percent, would lose coverage. It also estimates that ditching the mandate would require raising $46 billion from 2014 through 2023 to offset the cost of the elimination of penalty revenue and the increased spending on government health benefits.

What’s interesting about the study is that it isn’t coming from a group traditionally opposed to the law. In fact, quite the opposite. The study argues that ditching the mandate will strengthen the law and help it become more entrenched.

“Eliminating the employer responsibility requirements should substantially diminish employer opposition to the ACA,” the study reads. “In fact, without that burden, employers may play more of a role promoting the expansion of coverage under the law.”

Most health insurance reformers believe that getting insurance through your employer is a costly, and unnecessary benefit and should be eliminated. Even some on the right agree with that notion. Obamacare was supposed to be a way station on the march to get rid of employer based insurance altogether — another feature, not a bug.

The Obama administration figured that the political fallout from implementing the mandate was greater than the need to preserve insurance for millions of workers. So it’s been delayed until 2016 for most employers.

Might the mandate be canceled? A $46 billion shortfall over the next decade would be hard to overcome — unless Obamacare is repealed and then it won’t matter.

Besides, there are other affects of the mandate that may force its cancellation:

The study acknowledges an argument often advanced by both conservatives and businesses that hiring will likely be stunted by the arbitrary cut-offs in the mandate, imposing different requirements and starting dates for companies employing with below 50, 50-99, and 100-plus workers.

But the federal government expects to gain billions in penalty payments from companies that choose not to obey the mandate in the end. These costs “are likely to be passed back to the workers in the form of reduced wages,” particularly low-wage employees.

There have been suggestions that employer health insurance be taxed as regular income. Eliminating the tax subsidy for health insurance could cut as much as $1.6 trillion from the deficit over the next 10 years. But the political cost would be great, considering that eliminating the tax subsidy would raise taxes on tens of millions of Americans. It’s not likely to happen anytime soon.

Sometime later this summer and into fall, millions of employees may be getting notices that their company will no longer be offering insurance, forcing them to buy insurance on the exchanges. How many businesses would rather pay the penalty rather than pay for health insurance is unknown.  Kaiser thinks that as many as 43 million workers will find themselves in that boat over the next few years.

It’s just one more indication that anyone “celebrating “the “success” of Obamacare  is living in a cocoon.

Rick Moran is PJ Media's Chicago editor and Blog editor at The American Thinker. He is also host of the"RINO Hour of Power" on Blog Talk Radio. His own blog is Right Wing Nut House.

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These costs “are likely to be passed back to the workers in the form of reduced wages,” particularly low-wage employees. SNIP

This might be one reason the Progs want to jack up the minimum wage.
14 weeks ago
14 weeks ago Link To Comment
NSS

The last S stands for Sherlock.
14 weeks ago
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