I wish to be plainly transparent with my bias before we start. I believe The Patient Protection and Affordable Care Act, colloquially known as Obamacare, was poorly conceived, poorly written, shoddily legislated, and has been poorly executed to date. I predict that Obamacare will be a debacle of epic proportions, actually resulting in fewer adequately insured citizens than we had prior to its creation.
If I am correct, this will have significant impact on the workers’ compensation industry.
As a perfect example to use for my argument, I need look no further than the federal governments establishment of several “Obamacare Call Centers“, being created to help the dazed and confused masses navigate this quagmire. What is so significant about these government call centers? Many of the people hired to fulfill these functions have been informed they are considered “intermittent employees”; part-time workers, and will therefore not qualify for benefits, including health insurance.
This is interesting, as President Obama has been highly critical of employers who have voiced plans to shift their workers to part time status to avoid the onerous costs of this legislation. Yet our government, with the very people hired to assist with it’s rollout, is doing the exact same thing.
On one level it is good to see a cost conscious government program. On another level, perhaps our President and our government should practice what they preach.
Obamacare does nothing to reduce, control or encourage lower costs in healthcare. It is not “universal coverage”, as many people foolishly believe. In theory, it is supposed to add 30,000,000 previously uninsured to an already inflation burdened system, supposedly spreading the cost of care across a greater number of people, many of them young and healthy. Previously uninsurable people – those with pre-existing conditions – may now buy coverage; they cannot be denied. This cost is supposed to be absorbed by this increased number of (young and healthy) payers. The legislation does nothing to add providers, incentivize savings, or otherwise improve individual care.
Here is the fundamental issue in my view. Those new healthy buyers aren’t buying it, and will not buy it. I believe that many people who have not bought insurance in the past are unlikely to buy it now. For some it will be a matter of ignorance, not knowing what they should do, or believing that healthcare reform simply should be an entitlement providing free health care (after all, we’ve been hearing that health care is now a “right”). For many it will still be a matter of cost. They can’t afford it, or won’t pay for it, even at heavily subsidized levels. The initial penalties in the tax code are very light, and are frankly cheaper than buying the insurance.
Some unions, many of whom openly supported the legislation, are desperately seeking exemptions from it’s implementation. Even the union that represents IRS employees, the very agency tasked with enforcing this mess, is urging its members to write to their congressmen to help get the union out of Obamacare. A congressman is trying to force all Federal employees into Obamacare exchanges under the theory that, if it is good for John Q. Public, it is good for Federal employees. The union for the IRS workers wisely disagrees.
They know better.
If I were young and healthy, I might opt to wait until I got sick before purchasing, since the tax penalty will only be $95 (and will cap at $695 in a few years), the emergency room will still treat me, and I can not be turned down when I do develop a serious medical condition. No need to buy it until I need it, after all. Indeed, early indicators are that the young and healthy, desperately needed to give Obamacare any glimmer of hope for success, are not enthused, and are not planning to sign up.
Finally, all of the “free” preventative care the legislation mandates, combined with those pre-existing conditions coming online will actually serve to drive costs up for everyone, a reality that the government is now begrudgingly admitting.
Employers know this, and are bracing for the worst. They are already seeing skyrocketing group rates. My own company group plan took a 32% hike in premiums this summer. Those with 50 or more employees may be legally required to provide coverage for full time employees, but they are not required to have full time employees (yet). Those that can cut hours, will. Those on the edge of the limits that can cut staff, will as well.
And now our government has shown it will do the same, opting for part time status for the very people dedicated to helping others get their benefit questions answered. Even the union for IRS enforcers doesn’t want to be on this sinking ship.
The end result? Many who have been insured won’t be anymore, and probably won’t be able to buy insurance with a 25% or greater cut in their income. Those healthy folks who have never purchased insurance are not likely to do so now. We quite possibly may see a reduction in the number of people who have any insurance at all, or at best a reduction in people with adequate coverage. The remaining pool of insureds will be left to cover these new mandated “benefits”.
How will this affect workers’ comp? Costs will certainly continue their relentless rise, since mostly those who need medical care will find their way into the system, while claims may likely see a spike. If people lose their health insurance, where do you think they may turn? That weekend slip on the pool deck might become Monday mornings trip on the stairs. The strained back from lifting Baby Joey could be reinvented as the factory floor lifting injury. Workers’ comp is already paying for many social ills via the issues of co-morbidity. Obamacare was supposed to take the burden of those problematic but unrelated issues. If my suspicions are correct, that will not be the case. Quite the opposite will be true.
And our government’s actions, designed to avoid the very same obligations it demands from private employers, does nothing to assuage my fear that I am right.