Barack, the Cable Guy
Across North Carolina and around the country, thousands of small business owners and human-resources officials are scrambling to determine whether they can continue providing the health insurance coverage they’ve promised to millions of employees. Or if they’ll have to offload their workers to the government-approved “exchanges” that are a major component of ObamaCare.
This tussle grabbed few headlines in the run-up to the House Democrats’ party-line vote in late March. But it’s one of the many costs the law will impose on workers and employers. Finding benefit packages that satisfy the letter of the law won’t be cheap — in financial terms or in workers’ freedoms.
Just as there’s no truly competitive marketplace for residential electricity, natural gas, water and sewer service, and trash pickup, ObamaCare amounts to a government takeover of the medical industry. Just like utilities, insurance companies under ObamaCare will be regulated heavily, price-controlled, and subjected to the whims of government functionaries — and you’ll be forced to purchase service from a government-approved supplier.
We could say, “If you like your cable company, you’ll love ObamaCare,” but that’s unfair to the cable industry. After all, if you’re dissatisfied with Time Warner, you can sign up for Dish Network or DirecTV, intall fiber-optic lines, or watch tons of TV shows online.
By contrast, if the limited options under ObamaCare don’t suit you, you’re stuck with them. And the individual mandate in the legislation makes it illegal to opt out.
For example, some 8 million employees take advantage of high-deductible policies for catastrophic coverage using Health Savings Accounts as a backstop. At press time, it’s unclear whether these plans can survive when ObamaCare kicks in.
For one thing, the new law requires employer-provided health insurance to have a minimum actuarial value of at least 70 percent of all the benefits covered. Traditional medical plans — financed with premiums, deductibles, and co-pays — typically meet that standard.
Consumer-driven employer plans (like that Carolina Journal’s publisher, the John Locke Foundation, offers to employees) may not satisfy that mandate. In these plans, employees pay for routine treatments out-of-pocket — mainly from their tax-free HSAs — but often wind up spending less money overall because their premiums are lower. In 2009, the average family premium in a consumer-driven plan cost one-third less than its traditional counterpart.
Federal regulators have not said whether employees’ HSA contributions will count in the actuarial calculations. If they aren’t, consumer-driven plans won’t pass muster with the feds.
More than consumer-driven plans are at risk. Though the law has a grandfather clause, allowing insurance plans that were legal before ObamaCare passed to stay in place, changing the benefits or coverage could invalidate them, forcing workers into the government-regulated exchanges.
So if your insurance provider has to tweak co-pays or employer contributions to keep its medical plans solvent, your health insurance could be illegal. That’s why it’s clear that March 21’s House vote approving ObamaCare didn’t end the debate over health insurance. It started it.