The Obama administration's decision Tuesday to delay a key provision of the Affordable Care Act for a year sounds worse than it is. Businesses with more than 50 full-time workers will now have until 2015 to either provide health coverage for their employees or pay fines, a concession that Republicans have quickly pounced on as proof that Obamacare as a whole is an unworkable monstrosity and which has many others scratching their heads at the fact that requirements for individuals and small businesses continue unabated. On a symbolic level, this move is terrible. In terms of the goal of expanding health care coverage to as many Americans as possible as soon as possible, though, its effect will likely be marginal.
Only a small fraction of American companies — something on the order of 5 percent — employ 50 or more workers. Of those firms, the vast majority — again, somewhere around 95 percent — offer health insurance. Even if this provision of the health care reform law prompted all of those companies to start offering affordable, quality coverage, its impact on reducing the number of uninsured would pale next to the other provisions of the law that will go into effect, such as the mandate that individuals buy coverage, the expansion of Medicaid, and the advent of health insurance marketplaces with government subsidies for low- and moderate-income people who do not have coverage through their jobs. Big companies tend to offer their employees health insurance because it enables them to attract and retain good workers, it reduces absenteeism because employees are healthier, and it offers a tax-advantaged way to increase compensation. That will remain true whether the employer mandate is in effect or not.
The idea of the employer mandate is certainly appealing politically. If individuals are going to be required to obtain coverage, and if most small businesses that offer coverage will be required to offer high-quality plans, then it only seems fair that big businesses be required to chip in as well. The problem is, the law, as written, appeared likely to produce some unintended results.
Some companies at or just above the 50-employee cutoff have said they will fire workers or convert some to part-time to avoid the requirement. It would effectively tax companies for hiring low-income workers who would qualify for subsidies in the new health insurance exchanges and thus create a disincentive for lifting people out of poverty. And even companies that do offer insurance will be subject to extensive reporting requirements. The administration says it is delaying the effect of the law so that it can iron out the definitions of full-time and part-time workers and simplify the reporting scheme. But if the goal is to make sure that all stakeholders are contributing to the cost of coverage, there are simpler, less distorting ways to do it — for example, focusing not on the number of hours employees work but on the percentage of payroll a company spends on health care.
By delaying for a year, the Obama administration creates a whole new set of problems. Without mandatory reporting by employers, for example, how will the government know for sure that a worker qualifies for subsidies on the insurance exchanges? The decision is bound to engender ill will by keeping in place the individual mandate but dropping the one for large businesses, and it has fed into the Republicans' narrative that the Affordable Care Act is an unwieldy mess that is going to create havoc once it is fully implemented.
It's that last part that's the real root of the problem. It was to be expected that a piece of legislation as significant as the Affordable Care Act would require adjustments to work effectively, but Republicans have no interest in making it work. Instead, they are eager to find any new excuse to vote for a repeal of the whole thing on a hollow promise that they could enact something simpler and more effective — not that they have ever offered any such proposal. If Republicans were actually interested in expanding health insurance coverage in a way that is fair to both individuals and businesses, they would engage with the White House and congressional Democrats in an effort to tweak the legislation to make it better. Instead, they want once again to make Obamacare a wedge issue in the next election.
They can go ahead and try. Americans already are or soon will be familiar with the benefits of the legislation — children allowed to stay on their parents' policies into young adulthood; ends to lifetime benefit limits; a ban on exclusions from insurance because of pre-existing medical conditions; coverage for preventive care and screenings; and the creation of exchanges in which individuals can shop around to determine the right combination of quality and cost. It will quickly become apparent that states that have embraced the law, like Maryland, will be able to expand coverage to almost everyone while offering consumers real choices, while states that have not will fall farther behind. The White House's announcement Tuesday was an embarrassment, but it doesn't begin to undermine the good that will be done by the Affordable Care Act.Copyright © 2015, The Baltimore Sun