Friday, July 26, 2013

July, 2013 Obama Care Update, Part 2: Unons Jump The Obama Care Ship, Jay Carney Stays On Board, and More

Yesterday, we took a look at the “dirty dozen” major failures of Obama Care. These failures included under enrollment, budget overruns, program cancellations, program failures, program delays, and just plan incompetence. Today, we will look at more failures but at a lower level of detail to see how this horrid piece of legislation is harming Americans and the economy.

1) Union organizations had been one of the strongest advocates for Obama Care when it was being developed. This support quickly changed to hypocrisy soon after the legislation was passed when the union actually found out what the law was going to do to their members’ health insurance plans. Many, many unions immediately asked for waivers to the laws requirements to gain at least a temporary reprieve from its ill effects.

That hypocrisy has now turned into outright hostility against the law. We have previously reported on how some unions have now blatantly come out against the law. The latest to turn against it is the International Brotherhood of Electrical Workers (IBEW). This is what they recently said in their official white paper on the legislaiton:

“The ACA threatens the viability of multi-employer health plans in four ways: 1) the high employee threshold of the employer mandate 2) the re-insurance fee, 3) the definition of qualified health plans, and 4) the lack of multi-employer specific administrative guidance. We believe it may be impossible to reverse the damage done to these plans if these issues are not resolved. The IBEW cannot afford to sit on the sidelines at the ACA threatens to harm our members by dismantling multi-employer plans.”

So much for that initial support of Obama’s health care and insurance reform. At least this union is now actively against it, having finally understood what damage it will do to its members.

2) According to a Washington Examiner article from July 10, 2013, White House spokesperson took an uncalled swipe and insult at all those who view Obama Care as an unfolding disaster, based on the reality of what has happened so far. Jay Carney got nasty at a recent press briefing during his defense of the Obama administration’s decision to delay the implementation of the health care law’s employer mandate. He criticized those who question the legality of putting off parts of the law, calling them “willfully ignorant.”

Let’s look at some facts, Mr. Carney, before we decide who is “ignorant:”

The legislation plainly states that this component of the law is to be implemented on January 1, 2014. It does not say January 1, 2015. 
Although many Republicans are pointing out this LEGAL requirement and Senator Tom Harkin, a Democrat and leading advocate of Obama Care, is also questioning the legality of delaying the implementation of this program.

Not a good way to win friends and influence people, calling them ignorant when in truth they are speaking the truth and you are taking the discussion down into the mud. Given how poorly the entire Obama Care process is going, insulting anyone is not a good strategy for salvaging any part of this ignorant legislation.

3) We have previously reported on many businesses that are cutting hours and terminating health care insurance for employees because they cannot afford to carry either full time employees or continue health insurance as a result of Obama Care requirements. Thus, many Americans are getting hit with a double whammy of Obama Care insults, fewer working hours resulting in less take home pay and less likely to have health care insurance. Talk about a bad piece of legislation and its unintended consequences.

Many of these cutbacks have been in the restaurant and service industries, industries with very low profit margins which would have been wiped out by the Obama Care mandates unless they cutbacks were implemented. But as a July 19, 2013 article from Investors Business Daily points out, local and state government have been even more aggressive in cutting workers; hours and health care insurance coverage as a result of Obama Care. 

According to the article, the result is that part-time government workers, many of them low-income, face pay cuts that can top $3,000 a year, and yet will still be left without employer-provided benefits. The article provides a small sample of local news reports about what local government officials are saying about ObamaCare, and the steps they have to take to avoid or minimize its costs.

- Phillipsburg, Kansas: "School administrators here say they are alarmed and confounded by the looming new costs they face with the implementation of the Affordable Care Act," according to the Kaiser Health Institute News Service. Chris Hipp, director of a Kansas special education cooperative, warned that Obama Care's costs "could put us all out of business or change significantly how we do business," adding that "we are not built to pay full health benefits for non-certified folks who work a little more than 1,000 hours a year."

- Dearborn, Michigan.: "If we had to provide health care and other benefits to all of our employees, the burden on the city would be tremendous," said Mayor John O'Reilly, explaining why the city is cutting its more than 700 part-time and seasonal workers down to 28 hours a week. "The city is like any private or public employer having to adjust to changes in the law."

- Indiana: "What I'm seeing across the state is school districts, unfortunately, having to reduce the hours that they are having some of their folks work, primarily so they don't have to worry about the (ObamaCare) penalties, or they don't have to provide them health insurance, which would be very, very costly," said Dennis Costerison, executive director of the Indiana Association of School Business Officials. Ft. Wayne Community Schools, for example, are cutting yours for nearly three-quarters of its part-time aides.

- Omaha, Nebraska.: "The biggest problem is everyone said that ObamaCare is only going to help cut costs. Nothing could be further from the truth," said Mike Kennedy , who serves on the board of Millard Public Schools, just outside the city, and figures ObamaCare will raise its costs by $400,000. A neighboring school district is reducing hours for up to 281 part-time employees to avoid $2.5 million in new costs, which will result in pay cuts of up to $3,300.

- Long Beach, California: "We are in the same boat as many employers," said Tom Modica, Long Beach's director of government affairs. "We need to maintain the programs and service levels we have now." So the city is going to cut hours for 200 part-time workers so it doesn't have to pay $2 million to provide health benefits.

- Salt Lake City, Utah: "With new provisions in the Affordable Care Act, there was going to be a significant burden upon Granite School District and our taxpayers to offset the cost of benefits," said spokesman Ben Horsley. He says covering the district's part-time workers would cost about $14 million, and so about 1,000 will have their hours cut to 29 a week.

- Cape May County, Jew Jersey: "A number of people in the nation who read it are recognizing how detrimental (Obama Care is) to government and private employers out there," said Gerald Thornton, the county's finance director who is trying to figure out how to budget for the law.

- Virginia: "The Commonwealth of Virginia is grappling with the same issues that many businesses in the private sector are as they struggle to deal with the costs imposed by the Affordable Care Act," Paul Logan, a spokesman for Gov. McDonnell, said. The state is requiring that about 7,000 part-time government workers put in no more than 29 hours a week.

- Texas: "The Affordable Care Act has added so much complexity and administrative burden that there is nothing affordable about it," said Jared Pope, who is consulting with Texas municipal governments on ObamaCare. Dallas expects its health costs to climb $2.1 million next year. Plano is cutting hours to avoid $1 million in new costs.

- Kern County, California: "It will affect multiple departments, a majority of departments," said the county's deputy administrative officer Eric Nisbett, explaining that unless the county cut worker hours for 800 employees, ObamaCare would cost it up to $8 million a year.

- Allegheny County, Pennsylvania: "There's frustration and anger and sadness and resentment, you know, but you don't have a voice," said adjunct English professor Clint Benjamin in the wake of the Community College of Allegheny County's decision to cut hours for about 400 adjunct faculty and other employees so it wouldn't have to pay $6 million in ObamaCare-related fees next year.

- Medina, Ohio: "We feel bad as a city administration and as a council in having to cut hours from 35 to 29," Medina Mayor Dennis Hanwell said. "We have the budget to pay the people, but we do not have the budget to pay for the health care." If they hadn't made that cut, the city faced up to $1 million in new health costs courtesy of ObamaCare.

- Birmingham, Michigan Commissioner Gordon Rinschler may have summed up best the reaction that countless businesses and governments are having to ObamaCare, saying: "We simply can't afford the Affordable Care Act."

I included all of the examples given in the article to provide a sense of how widespread and devastating this piece of legislation is, especially to part time, lower income workers. These workers and the decisions makers that affect them are not, as Mr. Carney would say, “willfully ignorant” of Obama Care. They are living the horror of it every day.

We keep returning to the bottom line of why Obama Care is an unadulterated failure: the legislation and those who wrote it never addressed the underlying root causes of our high health care costs. If you do not understand the root causes, the odds of writing the right prescription to address and terminate those root causes are likely doomed to failure. 

These root causes are relatively easy to identify:

  • Americans smoke too much.
  • The Federal government monetarily subsidizes the growth of tobacco.
  • Americans eat too much.
  • Americans eat too much of the wrong kind of food.
  • The Federal government monetarily subsidizes the low cost of inexpensive corn fructose, a fattening agent that infests much of America’s food chain.
  • Americans do not exercise enough.
  • The Federal government wastes over $100 billion a year in its primary health care programs today, Medicare and Medicaid, $100 billion a year that would allow many other Americans to get health care coverage and support if the waste and fraud could be eliminated.
  • The health care industry in the country today needs major tort and malpractice reforms, reforms that have proven successful at the state level in reducing health care costs.
  • State boundary restrictions regarding cross border health care insurance company competition needs to be eliminated in order for market competition to drive down costs.

None of these root causes are substantially addressed by Obama Care. His legislation is just a reshuffling of taxes and fees without any reduction in the root causes of our high health care costs, a fact the Mr. Carney is willfully ignorant about.

The disaster known as Obama Care will continue unfolding tomorrow.
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