Affordable Care Act costs cause Walmart to drop coverage for 30,000 part-time employees

Back in 2011, Doug Henwood of the Left Business Observer argued that Obamacare, the Affordable Care Act, would result in some employers dropping their existing coverage and forcing employers onto the exchanges.

Henwood's original article can be found here. Paul Krugman, the well-known liberal economist, argued that this would not happen, and criticised a survey that predicted this would occur. Relying on another source Krugman suggests that the survey is not a reliable predictor of what will happen since most of the participants who answered the questionaire did not know how much on average they spent on health care per full-time employee: When asked how much their companies spend on medical and prescription drug benefits per full-time employee – something you might expect a health benefit pro to be intimately familiar with – 58.3% said they didn’t know. While this is correct, Henwood points out some neglected aspects in the criticism. The question was actually somewhat more complicated than described in the quote but even more telling only about 10 per cent of the respondents were health benefit pros. However, they are still quite capable of judging that they will be spending more under Obamacare.
Recent news reports in the Wall Street Journal support Henwood's prediction. Wal-Mart is both cutting coverage for 30,000 part-time workers--or associates as Walmart calls them--and also raising premiums for others. The moves are designed to contain costs as a result of the Affordable Care Act. Many companies are shifting more of their costs onto their employees. Wal-Mart with 1.4 million "associates" predicts that its health care costs will rise $500 million more than it had predicted for the year ending this coming January. Sally Welborn, senior vice president of global benefits said that the company had to keep its eye on costs but would not say how much Wal-Mart expected to save by its moves. Beginning in 2015 Obamacare will require large companies to provide health care coverage for most of their employees who work at least 30 hours per week or pay a penalty starting at 2,000 per worker. However, many companies are finding it cheaper to simply pay the penalty than provide the coverage. Individual employers are then forced to purchase coverage on government exchanges.
 Walmart is not the only corporation to join in the parade to drop coverage. Target has said it would stop offering benefits to part-time workers. Home Depot also ended coverage for 20,000 part-time workers. No doubt Obamacare does have some positive features. For instance, many more Americans now have health insurance when they had none before.
 Nevertheless Obamacare so criticized by the right wing is actually a conservative's dream and based upon conservative principles as an article by a fellow of the American Enterprise Institute in the New York Times points out: The plan has few champions on the left precisely because it is not a government takeover of health care. It is not a single-payer system, nor “Medicare for all”; it does not include a “public option,” a health plan offered by a federal insurer. It is a ratification of market ideas, modified to address problems unique to health insurance. Yet, Obamacare is defended by many of the liberal left including Krugman no doubt as the lesser evil compared to what the Republicans might do.
According to Obama the Affordable Care Act is a great example of legislation not moulded by special interests as he claimed just after passge of the act: “Tonight, we pushed back on the undue influence of special interests. … We proved that this government — a government of the people and by the people — still works for the people.” Even before he spoke the Pharmaceutical Researchers and Manufacturers of America also hailed the health bill as important and historic. A Wall Street Journal blog hailed the act as a great opportunity for investors. Among the big winners are not only health care providers and pharmaceutical companies but the big health insurance companies as well, as even Forbes notes as well as others. Far from showing that the Obama administration can push back against undue influence of special interests, the Affordable Care Act shows the exact opposite.
The defender of the single payer system in the appended video is incorrect when he speaks of their being no co-pays at least in many systems. "Reforms" are constantly degrading existing universal systems with less coverage and increased co-pays to shift costs from the government onto the individual, although the Canadian system does not allow co-pays.

Critique of Medical Reform Bills by Single Payer Advocates

This article shows the way in which both Reform bills actually help out insurance companies and dump high risk more expensive patients onto Medicare thus increasing the cost to the taxpayer. No doubt these increasing expensives will eventually result in a reaction that will cut services to the elderly. From this site.


An Unworkable Mess
Steffie Woolhandler is a professor of medicine and David Himmelstein is an associate professor of medicine, both at Harvard Medical School. They are co-founders of Physicians for a National Health Program.

Milk and lemon both taste good in tea. But mix them together and it’s a curdled mess. Similarly, the latest Senate health reform compromise combines two appetizing elements — a Medicare expansion and tighter insurance regulations –- to create a noxious brew.

We need Medicare for all, not a plan that takes only the high-cost patients off private insurers’ books and makes them Medicare’s problem.
Both the House and Senate versions of reform would turn over hundreds of billions of tax dollars to the same private insurers who’ve proven incapable of controlling costs or giving American families the coverage they need. And these bills would make failure to buy insurers’ defective products a federal offense. Together these measures greatly augment insurers’ financial and, hence, political muscle.

The only concessions wrung out of the insurers for this windfall are modest new regulations on the policies they sell to individuals: insurers will have to accept every applicant; they won’t be allowed charge the sick higher premiums; and they’ll be able to charge older people only two to three times more than the young.



Most of these regulations won’t change things for people who get their coverage through an employer, but they’re helpful for the many of the roughly 7 percent of the population who buy their own private insurance.

For insurers, the regulations make the near-elderly who don’t get employer-sponsored coverage into pariahs. On average, they cost insurers far more than twice as much as the near-teens, but they can’t be charged premiums to match their costs.

Now the Senate plans to take some of these high-cost patients off private insurers’ books, and make them Medicare’s problem. Consequently, the costs of this Medicare buy-in will be high — both for patients and for the taxpayers who will subsidize the near-poor starting in 2014.

Meanwhile, younger, healthier and hence more profitable patients will be forced into private insurance. There’s no public option for them, nor for anyone offered employer-sponsored coverage. If you have private insurance and you like it, you can keep it; if you have private insurance and you don’t like it, you still have to keep it.

But even though it’s bad health policy, this new compromise is brilliant politics. For insurers, it offers a hidden subsidy. Meanwhile, it gives the appearance of responding to the vocal and growing legion of single payer supporters who want Medicare for All.

In the end, the Senate compromise, like its House counterpart, will do little to salvage the sinking U.S. health system. Costs will continue to skyrocket, putting coverage more and more out of reach for middle class Americans, and driving the costs of taxpayer-funded subsidies through the roof.

In contrast, a single payer system could save nearly $400 billion annually on health insurers’ overhead and the paperwork they inflict on doctors and hospitals -– savings that would make universal coverage affordable. Medicare for All won’t grow from the Senate compromise, but from its ashes.

Paul Krugman: Health Care Terror

So-called reforms in universal systems recently are resulting in increased co-pays and shifting of costs to individuals. The Canadian system has always been less extensive than many European systems in that most dental work, long term care, and drugs are not covered. However there are provincial add ons that provide some pharmacare but usually involving co-pays of some description. One significant feature of the Canada Health Act is that co-pays or user fees are not allowed but of course this does not apply to what provinces have added on such as pharmacare.

July 9, 2007 / New York TIMES
Op-Ed Columnist
Health Care Terror
By PAUL KRUGMAN

These days terrorism is the first refuge of scoundrels. So when
British authorities announced that a ring of Muslim doctors working
for the National Health Service was behind the recent failed bomb
plot, we should have known what was coming.

"National healthcare: Breeding ground for terror?" read the on-screen
headline, as the Fox News host Neil Cavuto and the commentator Jerry
Bowyer solemnly discussed how universal health care promotes
terrorism.

While this was crass even by the standards of Bush-era political
discourse, Fox was following in a long tradition. For more than 60
years, the medical-industrial complex and its political allies have
used scare tactics to prevent America from following its conscience
and making access to health care a right for all its citizens.

I say conscience, because the health care issue is, most of all, about
morality.

That's what we learn from the overwhelming response to Michael Moore's
"Sicko." Health care reformers should, by all means, address the
anxieties of middle-class Americans, their growing and justified fear
of finding themselves uninsured or having their insurers deny coverage
when they need it most. But reformers shouldn't focus only on
self-interest. They should also appeal to Americans' sense of decency
and humanity.

What outrages people who see "Sicko" is the sheer cruelty and
injustice of the American health care system — sick people who can't
pay their hospital bills literally dumped on the sidewalk, a child who
dies because an emergency room that isn't a participant in her
mother's health plan won't treat her, hard-working Americans driven
into humiliating poverty by medical bills.

"Sicko" is a powerful call to action — but don't count the defenders
of the status quo out. History shows that they're very good at fending
off reform by finding new ways to scare us.

These scare tactics have often included over-the-top claims about the
dangers of government insurance. "Sicko" plays part of a recording
Ronald Reagan once made for the American Medical Association, warning
that a proposed program of health insurance for the elderly — the
program now known as Medicare — would lead to totalitarianism.

Right now, by the way, Medicare — which did enormous good, without
leading to a dictatorship — is being undermined by privatization.

Mainly, though, the big-money interests with a stake in the present
system want you to believe that universal health care would lead to a
crushing tax burden and lousy medical care.

Now, every wealthy country except the United States already has some
form of universal care. Citizens of these countries pay extra taxes as
a result — but they make up for that through savings on insurance
premiums and out-of-pocket medical costs. The overall cost of health
care in countries with universal coverage is much lower than it is
here.

Meanwhile, every available indicator says that in terms of quality,
access to needed care and health outcomes, the U.S. health care system
does worse, not better, than other advanced countries — even Britain,
which spends only about 40 percent as much per person as we do.

Yes, Canadians wait longer than insured Americans for elective
surgery. But over all, the average Canadian's access to health care is
as good as that of the average insured American — and much better
than
that of uninsured Americans, many of whom never receive needed care at
all.

And the French manage to provide arguably the best health care in the
world, without significant waiting lists of any kind. There's a scene
in "Sicko" in which expatriate Americans in Paris praise the French
system. According to the hard data they're not romanticizing. It
really is that good.

All of which raises the question Mr. Moore asks at the beginning of
"Sicko": who are we?

"We have always known that heedless self-interest was bad morals; we
know now that it is bad economics." So declared F.D.R. in 1937, in
words that apply perfectly to health care today. This isn't one of
those cases where we face painful tradeoffs — here, doing the right
thing is also cost-efficient. Universal health care would save
thousands of American lives each year, while actually saving money.

So this is a test. The only things standing in the way of universal
health care are the fear-mongering and influence-buying of interest
groups. If we can't overcome those forces here, there's not much hope
for America's future.

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