Obamacare “Fix” Raises Serious Questions
This week the House will debate and vote on the Save American Workers Act of 2014 (H.R. 2575), which would repeal Obamacare’s 30-hour rule and replace it with a 40 hour rule.
There is absolutely no doubt Obamacare’s 30-hour work week threshold has harmed individuals as employers predictably cut back on hours. In October 2011, The Heritage Foundation’s James Sherk predicted it would “price many unskilled workers out of full-time employment. He continued:
The employer mandate will also encourage employers to replace full-time jobs with part-time positions. Obamacare does not penalize employers for not providing health benefits to part-time employees, so part-time positions will cost much less to fill than full-time positions.
As such, the employer mandate has serious consequences for low-skilled workers, who are already facing the brunt of President Obama’s sluggish economy.
However, the cynically complex nature of Obamacare should cause lawmakers to question whether simply tweaking the destructive employer mandate will achieve the desired results. As Sherk also noted:
Many employers will forgo providing health benefits and dump workers onto the government health care exchanges. Doing so will incur a $2,000 penalty per full-time worker—far less than the cost of health premiums but still a $1 per hour increase in full-time employment costs.
By moving the employer mandate threshold to 40-hours, H.R. 2575 could put a whole new class of people into the scenario described above. The question for lawmakers is whether this replacement will really make things better for hardworking Americans. On that, the answer is anything but clear as employers could respond to the new rules by shifting even more employees onto the Obamacare exchanges.
In fact, the nonpartisan Congressional Budget Office stated in its estimate of H.R. 2575 that it would “Reduce the number of people receiving employment-based coverage—by about 1 million people [and] Increase the number of people obtaining coverage through Medicaid, the Children’s Health Insurance Program (CHIP), or health insurance exchanges—by between 500,000 and 1 million people;”
In other words, enacting H.R. 2575, while shielding some low-skilled workers from likely job losses and hour reductions, could cause more workers (those working close to 40 hours) to share the same fate. Furthermore, enacting H.R. 2575 would likely add more people to Obamacare’s massive new entitlements: the expanded Medicaid rolls and the new Obamacare Exchanges. Conservatives should be doing everything they can to limit Obamacare’s new entitlement rolls, and should be wary of creating new disruptions in an already fragile labor market.
Americans of all stripes are seeing their health care costs increase as they are saddled with fewer choices and a loss of doctors.
Obamacare cannot be fixed. It must be repealed and then replaced with an affordable system that allows health care which matches the needs of each person.