Welcome to ObamaCare, Part V
At a “White House to Main Street” event in Quincy, Illinois, President Obama departed from his prepared speech on financial regulatory reform to famously––perhaps infamously––quip his bizarre belief that “at a certain point [businesses have] made enough money.” Just one month prior to revealing his antithetical understanding of the American free-enterprise system, Obama signed into law the Patient Protection and Affordable Care Act; otherwise known as “ObamaCare.” A bill that has seemed to have an inverse effect––instead of lowering costs, several employers and insurers are expecting significantly higher costs––has almost ensured that businesses stop making money all together.
And by now, business leaders have had enough. Verizon CEO Ivan Seidenberg publicly opposed the administration’s agenda saying the “negative effects” of Obama’s policies are “simply too significant to ignore.” Verizon warned employees to “expect that Verizon’s costs will increase in the short-term” and that “many of the plans Verizon offers to employees…will be subject to the 40 percent excise tax.” For these and other “negative effects” Seidenberg ultimately concluded that “government is injecting uncertainty into the marketplace and making it harder to raise capital and create new businesses.”
Seidenberg is not alone. Intel CEO Paul Otellini forecast an “inevitable erosion and shift of wealth” brought on by the administration’s hostile, anti-growth policies. Additionally, Otellini saw the administration as “flummoxed by their experiment in Keynesian economics not working.” John Deere and Caterpillar both expect over $100 million in after-tax expenses and Boeing has notified employees their deductibles and co-payments will go up over the next few years. What’s more, 3M has announced it will stop offering insurance to its retirees. Even AARP, which was a strong proponent of the health care reform agenda, has announced an 8 to 13 percent increase in premiums as well as changes to deductibles and co-payments to avoid higher taxes.
Republican candidates throughout the country ran and won in November on the campaign message of “Repeal and Replace ObamaCare,” but businesses have already begun chipping away at the legislation, perhaps making it easier for the new Congress to reverse its high costs, fees, and taxes. In September of this year, the Department of Health and Human Services released a memo detailing the process by which an employer would obtain a “waiver” of the new annual limits requirements. The Patient Protection and Affordable Care Act now requires that by 2011 the dollar value of “essential health benefits” cannot be lower than $750,000, $1.25 million by 2012, and $2 million by 2014. McDonald’s was granted a waiver of this requirement for 115,000 employees, who otherwise would have lost their insurance because it would have become too costly for McDonald’s to comply with the new requirement. Among the employers who were granted waivers, which include Cigna, Jack in the Box, and the United Agricultural Benefit Trust, the United Federation of Teachers Welfare Fund was granted the largest employee waiver to date at 351,000 employees.
With 30 waivers granted and another 114 under review, the administration is scrambling to ensure the President’s promise that “no one will lose their current health insurance” is fulfilled. Yet, the Obama administration is defending, indeed ironically, granting the waivers as “part of a broader strategic effort to stave off threats by some health insurers to abandon markets, drop out of the business altogether or refuse to sell certain policies.” These waivers, Press Secretary Robert Gibbs said, will be valid “until there are better options available to them in 2014.” These so-called “better options” refers to health insurance “exchanges” where individuals will be able to use government subsidies to comply with the mandate that they be covered.
The question then becomes, are these in fact better options? Are there alternative options that the administration could have pursued in the crafting of this legislation had it listened to the American business community? Whole Foods CEO says yes. John Mackey wrote in a Wall Street Journal piece that government ought not get into the business of health insurance and simply make it easier for employers and employees to afford health coverage. Mackey insists that there is no “intrinsic right” to health care, just as there is no intrinsic right to food and shelter: “Health care is a service that we all need, but just like food and shelter it is best provided through voluntary and mutually beneficial market exchanges.” Besides, Mackey warns, once government gives you a “right” to health care, as in Canada and the U.K., it can then control your choices associated with that right.
With the help of the American business community and leaders like Ivan Seidenberg, Paul Otellini, and John Mackey, the new Congress must repeal and replace ObamaCare.