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Will Obamacare hurt job creation and marriage? Commentary: Families and employers pay the price

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At one time, getting a job was not that much of a problem. Neither was getting married. But the Affordable Care Act appears to create substantial disincentives both to hiring and marriage, potentially changing the fabric of American society in serious ways.

Let’s first look at hiring.

The Affordable Care Act is partly responsible for the slow jobs recovery. If employers with 50 or more employees do not offer the right kind of health insurance, and at least one employee gets subsidized coverage on the exchange, they are faced with penalties of $2,000 per employee per year. Since the first 30 workers are exempt from the penalty, moving from 49 to 50 workers can cost an employer $40,000 a year.

No wonder that many small businesses are opting to stay at 49 workers. If they decide to expand, they can use temporary workers or contract employees.

Bob Funk, president and founder of Express Employment Services, the fifth-largest employment agency in America, told The Wall Street Journal in an interview published last week, “Obamacare has been an absolute boon for my business…We’re up 8% this year. But it’s just terrible for the country.”

Funk continued, “Firms are just very reluctant to hire full-time workers. So they are taking on more temporary help, which is what we do.”

Companies can get around the penalty by hiring part-time workers, because they do not owe the $2,000 penalty on those who work fewer than 30 hours a week. Many companies such as SeaWorld SEAS -1.05%  , Wal-Mart WMT -0.35%  , and Lands’ End SHLD -2.20%  , are substituting part-time for full-time workers.

As well as effects on hiring, the subsidies in the Affordable Care Act, could increase the incentive to divorce and discourage marriage.

Under the Act, if workers have affordable single-family coverage from an employer — coverage that by law workers are obligated to accept — their family members will not be eligible for premium subsidies on the exchanges. This can make the cost of insurance for some low- or middle-income families unaffordable. But if they divorce, they get the subsidy.

Without subsidies, low-income families will not be able to afford to buy insurance on the state exchanges. The Internal Revenue Service estimates that family plans will cost $20,000 (in after-tax dollars) a year by 2016. Anyone under 400% of the poverty line, currently $94,000 for a family of four, qualifies for a subsidy — unless a family member has employer-provided insurance.

In a 2011 National Bureau of Economic Research working paper , Cornell University professor Richard Burkhauser, Indiana University professor Kosali Simon, and Cornell PhD candidate Sean Lyons showed that in 2014, when the law will take full effect, 13 million low-income Americans may be unable to get subsidized health insurance through new state health care exchanges because one family member has employer-provided coverage for that person only.

Perversely, the only way for other family members to get subsidized coverage would be for the spouses to get divorced. Then the spouse without coverage and the children could get coverage on the exchange.

This provision of the Act also discourages marriage. Say that Jeff, who receives health insurance from his employer, wants to marry Jenny, who is buying her subsidized health insurance from the state exchange. If they married, Jenny would no longer qualify for subsidized coverage.

Furthermore, since premium subsidies are on a sliding scale, two married people getting their coverage on the exchange would pay more than if they were single.

Those at 133% of the poverty line can pay no more than 3% of their income in premiums. Someone at 400% of the poverty line can pay no more than 9.5% of income. Two people making $32,000 annually would qualify for subsidies when single, but not when they got married and earned a combined income of $64,000. See 2013 poverty guidelines here.

The system is set up so that low-income employees with families may prefer to work for firms that do not offer health insurance. In that way, they can qualify to purchase family coverage through the exchange, and get a subsidy.

Furthermore, if the employer does offer health insurance, low-income workers with dependents might prefer that the coverage is unaffordable, that the employee’s share of the premium exceed the affordability test. That is because if coverage is unaffordable, then the employee will be able to buy subsidized insurance for his family on the exchange.

The employer would owe the Treasury a $3,000 penalty for providing unaffordable coverage for each employee whose coverage is unaffordable, but many workers would rationally accept $3,000 in lower wages to get the opportunity to buy subsidized health insurance.

The incentives are different for employees earning above 400% of the poverty line because they will not qualify for subsidies. They will be better off with an employer who does offer health insurance, because it’s a tax-free benefit. To the extent that premiums are paid through an employer, these can be paid out of pre-tax income — income that is not taxed.

Families without employer-provided insurance who do not qualify for a subsidy will be worse off because they will have to buy insurance with after-tax dollars on the exchange. So to pay for a $20,000 family policy — the Internal Revenue Service’s estimate of the cost of a health insurance plan on the exchange in 2016 — a person in the 50% federal and state tax bracket would have to earn an extra $40,000 in pre-tax dollars (because half would be paid in tax). A taxpayer in the 33% tax bracket would have use $30,000 in pre-tax dollars to buy a $20,000 policy.

That would be a substantial change from today, both in the price of the insurance and in its tax treatment. In order to retain higher-paid employees, firms are going to have to offer health insurance as a benefit.

The structure of the Affordable Care Act will increase the already widening gap between the rich and the poor. More divorces and fewer marriages at the lower end of the income scale result in more households headed by singles. Children in these families often have fewer advantages and lower educational performance, making it harder for them to get a well-paying job when they grow up.

There will be many glitches when the state exchanges open for business on Oct. 1. But the effects of the Act on job creation and marriage — two of the stepping stones to the American dream — are even more damaging.

Diana Furchtgott-Roth, former chief economist of the U.S. Department of Labor, directs Economics21 at the Manhattan Institute.

Minnow Slayer

by on Sep. 30, 2013 at 6:34 AM
Replies (31-40):
sweet-a-kins
by Emerald Member on Sep. 30, 2013 at 10:14 AM

 Someone making 10 buncks an hour not wanting insurence than we end up paying ANYWAY and I haven't heard anyone saying they dont WANT insurance just they cannot affored it.

If your company offers insurance and you refuse it, the company doesn't have to pay a fine

Quoting romalove:

I wish more people would understand that this law is so complicated and has so many "gotchas" that for the few people who are saying "my rates went down!" or "my preexisting conditions don't matter anymore!" there are tons of people who are being forced to pay crazy penalties without it increasing healthcare coverage one iota.

I had posted something a long time ago about an employer who paid 80 percent of his employees' healthcare costs, but it is up to the employee to decide if they want or don't want the healthcare.  If you are making 10 bucks an hour, affordable healthcare may not be your priority, so you can refuse the insurance, and even though your employer was doing the right thing, they will be fined the 2K.

It's nuts.

 

sweet-a-kins
by Emerald Member on Sep. 30, 2013 at 10:17 AM

 Your folks lost the fight...even McCain said so and thinks you should all move on

Irresponsible republicans want to tank our country for their psychotic ideological "principle"...They are not patriots, they are idiots harming our country...AGAIN.

They will lose, AGAIN and hurt the country in the process

Quoting Carpy:

The fight is worth a government shutdown.  This HAS to be stopped or our economy is going to plunge.  Way to many people will be devestated.

Quoting romalove:

I wish more people would understand that this law is so complicated and has so many "gotchas" that for the few people who are saying "my rates went down!" or "my preexisting conditions don't matter anymore!" there are tons of people who are being forced to pay crazy penalties without it increasing healthcare coverage one iota.

I had posted something a long time ago about an employer who paid 80 percent of his employees' healthcare costs, but it is up to the employee to decide if they want or don't want the healthcare.  If you are making 10 bucks an hour, affordable healthcare may not be your priority, so you can refuse the insurance, and even though your employer was doing the right thing, they will be fined the 2K.

It's nuts.


 

trippyhippy
by Gold Member on Sep. 30, 2013 at 10:26 AM

So only a "few" have preexisting conditions?  lol  I think you mean millions upon millions.


Quoting romalove:

I wish more people would understand that this law is so complicated and has so many "gotchas" that for the few people who are saying "my rates went down!" or "my preexisting conditions don't matter anymore!" there are tons of people who are being forced to pay crazy penalties without it increasing healthcare coverage one iota.

I had posted something a long time ago about an employer who paid 80 percent of his employees' healthcare costs, but it is up to the employee to decide if they want or don't want the healthcare.  If you are making 10 bucks an hour, affordable healthcare may not be your priority, so you can refuse the insurance, and even though your employer was doing the right thing, they will be fined the 2K.

It's nuts.



sweet-a-kins
by Emerald Member on Sep. 30, 2013 at 10:35 AM
1 mom liked this

 False and false

Quoting Carpy:

Get rid of Obamacare and the economy will boom.  Drill for oil and it will really boom.

Quoting romalove:


Quoting coolmommy2x:

While I do NOT think ACA is perfect, I have 2 issues with the first paragraph...jobs have been hard to come by since 2007 (at least here) and if you're gay, getting married is not easy. I don't blame ACA for either of those situations.

Yes, jobs have been difficult because of the economic downturn.

So we now add an onerous bill to people who are already struggling, who may have lost jobs and their insurance, who have lost much of their home equity because of the real estate bubble, and insist they take on a new bill or pay an IRS penalty, not to mention give employers a huge incentive not to take on more full time workers?

This makes zero sense.


 

sweet-a-kins
by Emerald Member on Sep. 30, 2013 at 10:42 AM

Obamacare Isn't Communism, And 13 Other Questions Answered

Like most Americans, you've probably heard of "Obamacare," but you're not exactly sure what it is. According to your uncle's Facebook posts, it sounds pretty scary, like maybe it's going to turn America into a Kenyan Soviet Union or something.

Well, good news: Obamacare is probably not going to do that! What a relief, huh? What other mysteries about the new health-care law can we clear up for you? Huffington Post health care reporter Jeffrey Young has 14 answers, for starters:

1. What is Obamacare, exactly? 

"Obamacare" is a nickname for the Affordable Care Act, a controversial law Congress passed and President Obama signed in 2010. To the chagrin of Republican opponents, who are still trying to kill the law, the Supreme Court declared it constitutional in 2012.

Its goal is to get health insurance to more Americans, 48 million of whom currently don't have any. This includes making it easier for people who aren't insured through work to buy their own insurance.

Obamacare also ends some notorious insurance practices. Now insurers can't exclude people with pre-existing conditions, can't kick patients off their plans when they run up big medical bills, and can't set dollar limits on how much care they'll cover. The law also says consumers' out-of-pocket costs generally can't exceed $6,350 for a single person or $12,700 for a family in a year. If a serious illness or accident creates costs above that amount, insurance pays all the bills.

Obamacare also sets "minimum essential benefits" every insurance plan must cover, including prescription drugs and maternity care. Many plans today don't include such benefits. Health screenings and birth control are available at no cost when you get them.

2. What if the government shuts down because Republicans want to stop Obamacare?  

It doesn't really matter. Ironically, the program will continue even if the federal government is technically closed for business.

3. Why is it called "Obamacare?" 

Because Obama pushed for its passage. Republican opponents first started using the term as an insult, but then Obama embraced it. Now everybody calls it Obamacare. Although perhaps Obama should reconsider, as "Obamacare" doesn't poll nearly as well as "Affordable Care Act."

4. So do I need to do anything? 

Probably not, if you're one of the roughly 80 percent of Americans who gets health insurance through their job or a family member's job, or is enrolled in a government program like Medicare, Medicaid, or the Children's Health Insurance Program. Congratulations, you might be done with this article.

If you're really worried about it, you should check with your employer about how your benefits might change in 2014.

And if you buy your own insurance, or if you aren't insured, then you will likely need to know and do some things.

5. OK, I buy my own insurance, what do I need to know? What do I do? 

You may find that your current plan isn't available next year because it doesn't meet the new standards set by Obamacare. That's good news because you'll probably be getting better health insurance. Bad news: you may have to pay more. You'll be able to shop for a new plan on new health-insurance exchanges.

6. What's a health insurance exchange? Sounds communist! 

"Exchange" is the technocratic term for the government's new health-insurance stores, which are run either by your state or the federal government. Also called "marketplaces," these web sites let you comparison-shop for various health plans. Massachusetts has had an exchange since 2006 and has the lowest uninsured rate in the U.S.

The exchanges are also the main way for people to get help paying for their coverage.

To find out what kind of policies are available, and what kind of help you're eligible to get, you'll have to give the exchange some basic personal information like your age, where you live, your income, family size and whether you smoke.

The exchanges are open to most everyone, but people who have health benefits at work or are in government programs like Medicaid are probably better off keeping what they have.

 

 

 

 

sweet-a-kins
by Emerald Member on Sep. 30, 2013 at 10:42 AM

 Click here to find the exchange for your home state.

7. A government-run health-insurance market? What could possibly go wrong?? That is sarcasm, by the way. 

Sarcasm noted. Not shockingly, there have been glitches in the online exchanges. Officials hope to fix them between the time they open for business on Oct. 1 and Jan. 1, when coverage starts under the new plans.

8. OK, so how much will health insurance cost me under Obamacare? 

Alas there's no simple answer to this question. Insurance premiums will vary a lot.. The national average price for a high-deductible plan is $249 a month, not counting subsidies -- but coverage like that would cost $144 in Minnesota and $425 in Wyoming. Rates are based on age, geographic location, family size and, sometimes, tobacco use. The insurance plans will differ a lot by monthly premium and by what share of medical bills you have to pay out of pocket.

The good news is that, under the law, women can't be charged higher rates than men, as is the norm in most states now. Older people also can't be made to pay more than three times what younger people pay now. Some states currently let insurers charge older people five times more than younger consumers, or even greater.  

9. So how will the government help me pay for health insurance? 

It gives you tax credits, based on your income, to help cover the cost. If you take the credit in advance, the government sends money straight to your insurance company to cover some of your premium. Or you can pay the full cost and claim the credit when you file your taxes. Tax credits are available to people who earn between the federal poverty level and four times that income, or about $11,500 to about $46,000 for a single person.

Extra discounts are available to those who earn up to 250 percent of poverty, or $28,725, for out-of-pocket expenses like deductibles and co-payments.

Depending on where you live, you also might qualify for Medicaid, the joint federal-state health care program for the poor, if you earn up to 133 percent of poverty, or about $15,300 for a single person. Only about half of states are using Obamcare money to expand Medicaid, though.

10. What's happens to me if I defy Obama's socialist takeover and refuse to get health insurance? 

The law says nearly every legal U.S. resident must get health coverage or pay a tax penalty. This is the dreaded "individual mandate." That's to make sure fewer people have to get care at hospitals that isn't paid for or results in big debts. It's a conservative idea, believe it or not.

If you already have health insurance, you obviously don't have to worry about this. If you earn less than $10,000 a year, you don't have to worry about this. If you can't find a health plan that costs 8 percent or less of your annual income, you don't have to worry about this. There are a handful of other exemptions to the law.

11. How much will this penalty be? 

It will start out at $95 or 1 percent of your income, whichever is higher, (unless you make less than $10,000, in which case there's no penalty). The penalty starts rising in 2015 and 2016, ending up at $695 or 2.5 percent of income. The IRS has more details on this fun penalty here.

This penalty will not require you to write a check: The IRS will take it out of your tax refund, if you have any. The IRS can't come after you if you don't pay it one year, but interest could build up over time. No matter what, though, you can't go to jail over it.

12. Can I keep my doctor under Obamacare? 

There's nothing in Obamacare that dictates what health-care provider you see. Same as always, different insurance policies have different doctors that are "in-network" or "out-of-network." You've just got to make sure that your doctor is in the network of whatever policy you get, or expect to pay more to visit her.

 

Be warned, though: Many of the health plans sold in Obamacare exchanges will have fewer choices of providers than those typically offered by employers. This is the downside of keeping costs low -- although for many people without insurance, their provider choice is limited to the emergency room. Exchanges have been trying to broaden their lists of providers ahead of enrollment.

 

13. Who can help me learn more and sign up? 

 

Obamacare exchanges have telephone hotlines available to walk you through the application process. HealthCare.gov is the federal government's main website for information and enrollment, and includes links to the state-run exchanges and to local groups offering help. The federal hotline is (800) 318-2596. State-run exchanges have their own.

 

If this sounds too daunting to do alone, there are also Obamacare sherpas, known as "navigators," "in-person assistors" or "certified application counselors". Private organizations like Enroll America can also help. Insurance agents and brokers will be happy to take your business, too.

 

State health agencies and Medicaid offices also may be providing help, as will community health centers that mainly serve low-income and uninsured patients. Information about what to do and where to find help will be distributed from a variety of sources, including community organizations, churches, charities, pharmacies, hospitals, doctors' offices and public libraries. The availability of help will vary greatly from state to state: Some states have resisted Obamacare's implementation because of political opposition from Republican governors and lawmakers.

 

14. Are there any deadlines I should know about? 

 

Open enrollment for insurance plans for 2014 begins Oct. 1 and runs through March 31. If you want a health insurance policy that's in place on New Year's Day, you have to make a choice by Dec. 15. After then, you have to wait a few weeks between picking a plan and using it. Next year, you'll have less time because enrollment for 2015 health plans runs from Oct. 15 through Dec. 7 in 2014.

impostagothkat
by on Sep. 30, 2013 at 10:52 AM

I love how congress ' are the voice of the people' can they hear the millions screaming no? I doubt it al their hear is their wallets screaming more!!  I will most likely end up with a part time job even with my degree, and I will most likely be getting a divorce just so that my kids and I can have health care. Sucks but whatever, married is just a state license and costs more in the end.

La_Vie_en_R0se
by Member on Sep. 30, 2013 at 10:54 AM
Since when are those concerns brand new? They have been brought up since the bill was introduced, but many people are sticking their head in the sand on those particular issues.


Quoting lga1965:

Yah, I'm a violater. She's using a brand new excuse for hating the,ACA....it's going to destroy marriage and family.

LOL.

That's crazy. A right wing lie

I really don't care if you think I "violate" anything. You have me beat in that contest. Harharhar.





Quoting billsfan1104:

And yet you are one of the biggest violators.


You discounted someone who has a degree in economics simply because you disagree with her. Instead of pointing out where she could be wrong, you called her crazy. But that is typical from you.








Quoting lga1965:

Ignorant...the famous word at CM.







Quoting Carpy:

That is similar to what I thought when I saw your ignorant reply.

Quoting lga1965:

Oh boy.









Quoting Carpy:


Diana Furchtgott-Roth, former chief economist of the U.S. Department of Labor, directs Economics21 at the Manhattan Institute.

I think I will defer to her credientials over yours

Quoting lga1965:

 






The structure of the Affordable Care Act will increase the already widening gap between the rich and the poor. More divorces and fewer marriages at the lower end of the income scale result in more households headed by singles. Children in these families often have fewer advantages and lower educational performance, making it harder for them to get a well-paying job when they grow up.






There will be many glitches when the state exchanges open for business on Oct. 1. But the effects of the Act on job creation and marriage — two of the stepping stones to the American dream — are even more damaging






************






Oh boy!  This is so overblown and wacky I have to laugh.






Where did you find this silly woman's Blog, Carpy? She's a nut job.




romalove
by Roma on Sep. 30, 2013 at 11:21 AM


Quoting sweet-a-kins:

 Someone making 10 buncks an hour not wanting insurence than we end up paying ANYWAY and I haven't heard anyone saying they dont WANT insurance just they cannot affored it.

If your company offers insurance and you refuse it, the company doesn't have to pay a fine

Quoting romalove:

I wish more people would understand that this law is so complicated and has so many "gotchas" that for the few people who are saying "my rates went down!" or "my preexisting conditions don't matter anymore!" there are tons of people who are being forced to pay crazy penalties without it increasing healthcare coverage one iota.

I had posted something a long time ago about an employer who paid 80 percent of his employees' healthcare costs, but it is up to the employee to decide if they want or don't want the healthcare.  If you are making 10 bucks an hour, affordable healthcare may not be your priority, so you can refuse the insurance, and even though your employer was doing the right thing, they will be fined the 2K.

It's nuts.

 

The last thing you said, it's wrong.

If they refuse it, you still pay the fine.

romalove
by Roma on Sep. 30, 2013 at 11:22 AM


Quoting sweet-a-kins:

 Someone making 10 buncks an hour not wanting insurence than we end up paying ANYWAY and I haven't heard anyone saying they dont WANT insurance just they cannot affored it.

If your company offers insurance and you refuse it, the company doesn't have to pay a fine

Quoting romalove:

I wish more people would understand that this law is so complicated and has so many "gotchas" that for the few people who are saying "my rates went down!" or "my preexisting conditions don't matter anymore!" there are tons of people who are being forced to pay crazy penalties without it increasing healthcare coverage one iota.

I had posted something a long time ago about an employer who paid 80 percent of his employees' healthcare costs, but it is up to the employee to decide if they want or don't want the healthcare.  If you are making 10 bucks an hour, affordable healthcare may not be your priority, so you can refuse the insurance, and even though your employer was doing the right thing, they will be fined the 2K.

It's nuts.

 

The last thing you said, it's wrong.

If they refuse it, you still pay the fine.

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