Wednesday, April 3, 2013
Obamacare Implementation Blues
I got the Weary Blues
And I can’t be satisfied.
Langston Hughes (1902-1967), The Weary Blues
Americans are growing weary, wary, and uncertain about implementation of Obamacare. It is scheduled to take full effect January 1, 2014. It is becoming obvious that the Obamacare administration is not ready.
The two main pillars of implementation are the individual mandate and health exchanges. The mandate is supposed to bring everybody on board to pay for Obamacare. Its full implementation will effect mostly the young , who comprise 48% of the uninsured, and small busineses. Not only will the young and healthy be compelled to buy insurance to fund the elder and the uminsured but their premiums and overall costs will be higher – by 32% overall according to the American Society of Actuaries. Health care costs for small businesses will spike sharply upward, and those with over 50 employees may be forced to reduce workers to part-time status to make ends meet.
The health exchanges are another kettle of ill smelling fish. More than half, some says two-thirds, of the states, are unwilling to set up exchanges and will leave the implementation to an ill-prepared federal government. The Blues, i.e., the Democratic states, are willing to go along with running exchanges but not most of the Reds, the states with GOP governors. This mixture of cooperation and obstructionism makes for a messy and confusing situation and delays in implementation.
The Obama administration is responding to this messiness in two ways: 1) by delaying implementation by one to two years the choices for 29 million small businesses on which plans to choose (Robert Pear, “Small Business Health Plan Choices for Obamacare Delayed,” April 1, New York Times); and 2) by gearing up for a national market campaign to sell Obamacare to a skeptical and distrusting public. The campaign will begin this summer and is intended to influence uninsured and Latino voters as a run-up to the 2014 midterms.
How these strategies will turn out no one knows. But the strategies will unquestionably prolong the uncertainties surrounding Obamacare. These uncertainties plus rising costs for benefits to workers will almost certainly negatively impact hiring and will probably cause more employers to drop existing coverage.
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