Freedom Line Blog

The Wall Street Journal shows us that the price of “affordable” health care is a reduced standard of living:

The Affordable Care Act requires large employers to offer a minimum level of health insurance to employees who work 30 hours a week or more starting in 2014, or face a penalty. The mandate is a particular challenge for colleges and universities, which increasingly rely on adjuncts to help keep costs down as states have scaled back funding for higher education.

A handful of schools, including Community College of Allegheny County in Pennsylvania and Youngstown State University in Ohio, have curbed the number of classes that adjuncts can teach in the current spring semester to limit the schools’ exposure to the health-insurance requirement.

The scaled back hours and pay for adjunct professors is part of a larger trend in a wide variety of industries.  Faced with lower thresholds that require new benefits, employers from universities to fast food restaurants face three options: pay-up, pay-out, or tap-out.  In other words, they can increase their health care spending, be fined for not increasing such spending, or cap the hours and pay of otherwise eligible workers to avoid the spending and the fines.

Unfortunately for workers, capping hours and pay reduces their standard of living.  But don’t worry.  In 2014, Obamacare mandates that every state will have a fully functioning health insurance exchange where newly impoverished workers can get “affordable” health care – some even with government (i.e. taxpayer) subsidies – so it’s a safe bet that all will be well when the feds are in charge of at least 25 separate state programs.  Right…

Human Events kindly provides the full text of Senator Marco Rubio’s speech at last night Jack Kemp Foundation ceremony bestowing on him its annual Leadership Award.

While the entire speech is a must-read, a passage on a specific health care reform struck this conservative as especially attractive:

In addition to promoting Flexible Savings Accounts, we should create a health insurance system that focuses on empowering people, not bureaucracy. People should be able to buy a health care plan that fits their needs and budget, from any company in America that is willing to sell it to them. And they should be able to buy it with tax free money, just like their employers buy it for many of them now.

That is, until Obamacare fully kicks in.  Since Obamacare’s regulations on employers only apply to full-time workers, there is a regulatory incentive to minimize the amount of full-time workers one employs.  In order to avoid either the stiff compliance costs or the steep penalties for failing to comply, employers are likely to increase the trend of laying-off workers, scaling back hours, or using contract workers in order to avoid the profit-killing expense of paying for all of Obamacare’s new required benefits.

Because of the entirely predictable response to Obamacare’s mandates, millions of American workers are likely to be caught in an employment trap where they work just enough at two or more jobs not to qualify as full-time employees with benefits.  If Republicans are unable to repeal Obamacare, then fixing the tax code to allow independent workers to buy affordable health plans with pre-tax dollars is one of the next best moves.  Marco Rubio seems poised to lead that charge.