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Obamacare Chickens Starting to Come Home to Roost

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It appears some of the Obamacare chickens are starting to come home to roost.

Opponents of the massive intervention in the health care and insurance markets warned that it would increase prices and negatively impact employment. Supporters of the government health care program poo-pooed those predictions. But as some of the real-world implications of Obamacare become more apparent, it appears those predicting those unintended consequences were right.

part timers

We’ve heard countless stories about soaring insurance premiums across the country over the last several months. According to a recent Chicago Tribune report, rising insurance costs will continue into the future:

Premiums for popular low-cost medical plans under the federal health care law are expected to go up an average of 11% next year, said a study that reinforced reports of sharp increases around the country in election season.”

The Kaiser study examined 14 metro areas where data has already been compiled, and found premiums for the “lowest-cost silver plan” will go up in 12 of the areas, while decreasing in only two. The largest increase was in Portland, Ore., where rates will go up 26%.

The problems caused by the poorly named Affordable Care Act aren’t limited to rising premiums. We now have evidence that the healthcare plan is indeed impacting employment in the US as well.

Peter Schiff has pointed out that many of the jobs created over the last several months have been part-time and low paying. It now appears at least part of the growth in part-time employment relates to an Obamacare mandate.

According to a study recently released by Goldman Sachs, at least a few hundred thousand workers have been involuntarily forced into part-time employment by Obamacare.

One of the provisions in the ACA required companies with 50-99 full-time workers to have company-provided healthcare plans in place by the beginning of this year. Workers forced to go part-time because of this mandate make up only a small fraction of the roughly 6.4 million workers who are employed part-time for economic reasons, but they makes up a significant share of the “underemployment gap” according to Alec Phillips, an economist at Goldman:

The share of involuntary part-time workers has declined much more slowly than the unemployment rate in this expansion, suggesting some structural factors are at play.”

Many mainstream media outlets immediately went into spin mode after Phillips’ analysis went public, claiming that the relatively small number – a “few hundred thousand” cited by Phillips – proves that the ACA is not impacting employment. But we need to put things into context. The mandate went into effect in January – just six months ago – and there is already a measurable effect. It will take time for the full impact of such a mandate to ripple its way through the economy.

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Incentives matter.

Mainstream pundits and supporters of government healthcare can try to wish that away all they want, but it’s a little like wishing away gravity. If you jump off a bridge, you’re going to hit the ground, no matter how much you wish it were otherwise. Logically, if a company with 50 to 60 full-time employees faces drastically increased expenses due to the ACA mandate, it will seek ways to avoid incurring those costs. The most obvious move is to make 11 of those employees part-time (or eliminate those positions completely) in order to get itself under the number of employees that triggers the mandate. It’s hard to comprehend how anybody fails to grasp that this kind of mandate will impact employment.

Considering the economic landscape employers face, is it any wonder so many of the new jobs being added to the economy are part-time?

And as the economy deteriorates, and the cost of insurance continues to rise, more and more companies will be forced to find ways to get out from under the burden of this government mandate. The numbers Phillips came up with are only the tip of a very dangerous iceberg.

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2 thoughts on “Obamacare Chickens Starting to Come Home to Roost

  1. Lisa H says:

    Yep. The bureaucracy always gets paid first in any Socialist scheme. Amerikan healthcare is rapidly entering that phase of “We pretend to work and they pretend to pay us”.

  2. Rasica says:

    If it was unintended – then this is a clear sign of incompetence. I believe it was rather an intendef device to milk the chickens

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