More Trauma from Obamacare

Obamacare is about to slam Virginians pretty hard. Virginia is one of 22 states that chose not to go along with President Obama’s unilateral extension that would allow people with non-compliant O’Care insurance to keep their insurance until 2017. The Cato Institute’s Michael Tanner reports that about 250,000 Virginians are about to lose their health insurance.

As Mr. Tanner points out, those who lose their insurance will likely find new insurance, but O’Care plans, on average, will most likely be worse than the plans replaced in terms of providers covered and cost-sharing.

And that’s the good news in that we are talking about only the individual mandate here. The really bad news is that next year starts the employer mandate for companies with more than 100 employees, and 2016 for companies with 50 to 99 employees. Employers are already moving workers from full-time to part-time work, increasing outsourcing, and raising prices to make up for the added costs of the ACA. Read here from Michael Tanner about the “glitches” that still remain on HealthCare.gov. and the latest wave of bad news for Americans, thanks to O’Care.

Tanner writes:

As bad as this news is, it affects only those buying insurance in the individual market. The worse news is that next year marks the start of the employer mandate for companies with more than 100 employees (although they will have to cover only 70 percent of their employees in 2015). Employers with 50 to 99 workers will be given until 2016 to provide their workers with insurance. As with individual plans, insurance that does not meet Obamacare standards will not satisfy the mandate. That means we should shortly start to see cancellation notices for non-compliant, non-grandfathered employer-based insurance plans.

A new report from the Kaiser Family Foundation estimates that only 37 percent of companies that offer insurance still have a grandfathered insurance plan. Only 26 percent of covered workers remain in those plans. Both numbers represent significant declines over the last few years. While some non-grandfathered plans may still be Obamacare compliant, most are likely to fall short in some respect.

Of course, employer-provided health insurance matters only if you have a job, especially a full-time job. In that regard, it is worth noting that recently released surveys from Federal Reserve Banks in New York, Philadelphia, and Atlanta found that businesses were cutting employment and shifting workers to part-time positions because of Obamacare. In one of these Fed surveys, roughly 20 percent of employers reported that they had moved workers from full- to part-time work, and another 17 percent said that they had increased outsourcing to avoid costs imposed by the health-care law. The New York survey also indicated that roughly a third of businesses were raising prices to offset some of the costs.

Democrats are undoubtedly hoping that voters have become inured to the drumbeat of bad news about Obamacare. The public has a short attention span, and one can hear only so many reports of Obamacare disasters before tuning out. This latest wave of bad news, however, may hit home in ways that are pretty tough to ignore.

Debbie Young

Debbie, editor-in-chief of Richardcyoung.com, has been associate editor of Dick Young’s investment strategy reports for over three decades. When not in Key West, Debbie spends her free time researching and writing in and about Paris and Burgundy, France, cooking on her AGA Cooker, and practicing yoga.