I believe that every American should have the opportunity to purchase affordable health care. Free market economics dictates that having more people buying a particular product or service with many competitors will lead to a natural decrease in prices. However, the artificial gambits of Obamacare mandating health insurance coverage have increased the cost of health insurance premiums, and its key provisions have yet to go into effect. The health insurance companies themselves are predicting skyrocketing premiums in the next year. Likewise, it should come as no surprise that the illegal delay on the employer mandate is simply another political ploy for the Democrats to run away from the health care monster they have created in time for the 2014-midterm elections.
The legality of this move is highly questionable. The Affordable Care Act is pretty explicit in section 1513 stating, "the amendments made by this section shall apply to months beginning after December 31, 2013." Granted, it is within the bounds of the executive branch to not enforce the law. However, an employee who expected their employer to provide them a health care plan within the next year can easily sue the federal government on this matter.
Small business owners are rejoicing at the news because they will not be forced to provide coverage to their employees. United Health Group projects rates for small businesses could go up by as much as 25-50% in the next year.
On top of this, taxpayers will be footing the bill for the delay. Since small business owners will dump their employees onto the private market while they can, most of the low-wage workers that are not covered by their employer that will now be forced to opt into the subsidized health care exchange system, as their employer is no longer mandated to offer the coverage for the year. These subsidies are supposed to be paid for by the penalties assessed to companies that are not providing health insurance to full time employees, defined as those working at least 30 hours a week. Considering that the Congressional Budget Office (CBO) estimated that the employer mandate would generate $10 billion in revenue in its first year, this bill is now turned over to the taxpayers. This is not accounting for the 3-point gap between the CBO projected unemployment for next year and the CBO's projections at the time of Obamacare's passage. Additionally, the expected average subsidy for a health care exchange participant is now $5,290, up from the original CBO projection of $3,970, or an increase of one-third in price.
Delaying this mandate is actually prolonging an existing trend that Obamacare has sought to reverse. Since 2000, more individuals have opted for coverage outside of their employer. With another year to restructure their plans, do not be surprised if this trend accelerates substantially over the next year. As Forbes' Avik Roy explains, the delay is both good and bad because it is forcing individuals to by insurance on their own, and not relying on their employers money, but also its forcing more people to opt into the costly exchange market.
It's pretty clear that mandating employers to provide health insurance is an incredibly ineffective, and ultimately more costly measure. The Washington Post's Ezra Klein elaborates that it encourages employers to change more full-time workers into part-time works, burdens businesses with more administrative costs and headaches, and would substantially discourage employers to hire lower-wage employees that would impose a cost on the company since they would more likely opt for the exchange. In sum, the employer health coverage mandate is simply bad policy and hopefully this delay will pave the way for the mandate to be repealed.
The delay will prevent Republicans from presenting stories of small business owners on the stump being crushed by the overwhelming costs of Obamacare. Nonetheless, the GOP will have also have significant ground to criticize the bill as so incredibly complicated, the Obama administration even needs more time to fully implement it. As Rep. Greg Walden (R-Oreg.) contests, the Democrats "are realizing today what's going to happen next year, and they're trying to scramble and dodge. This isn't going away. It's only going to get bigger and deeper.”
As costs continue to increase, the core goals and eventual results of Obamacare will be indefensible.