Let’s Discuss the Unmentionables

I know that it is now considered déclassé to say anything negative about Obamacare; we are merely to assume that it has succeeded beyond anyone’s wildest dreams and that anybody who suggests otherwise is either stupid or lying or both. But when I read stories like this one, I can’t help but think that believing in the conventional wisdom would only serve to cause trouble for us down the road:

Local business owners might be hoping the Affordable Care Act’s insurance mandates cover sticker shock.

The law’s employer coverage mandate doesn’t take effect until 2015, but early plan renewals are starting to roll in. And for some businesses, the premium jumps are positively painful.

Local insurance brokers are reporting spikes ranging from 35 percent to 120 percent on policies that renew from July to December. The increases are especially acute among employers with workforces made up of younger, healthier men. That’s because Obamacare prohibits offering lower rates to healthier groups. It also narrows the allowed premium gap between older and younger enrollees.

“It’s like if there were no more safe-driver discounts with State Farm,” said local insurance broker Frank Nolimal of Assurance Ltd. “Everybody has the same rate, whether you have three DUIs, or you’re a (nondrinking) churchgoing Mormon.”

The changes put as many as 90,000 policies across Nevada at risk of cancellation or nonrenewal this fall, said Las Vegas insurance broker William Wright, president of Chamber Insurance and Benefits. That’s more than three times the 25,000 enrollees affected in October, when Obamacare-compliant plans first hit the market.

Some workers are at higher risk than others of losing company-sponsored coverage. Professional, white-collar companies such as law or engineering firms will bite the bullet and renew at higher prices because they need to compete for scarce skilled labor, Nolimal said.

But moderately skilled or low-skilled people making $8 to $14 an hour working for landscaping businesses, fire-prevention firms or fencing companies could lose work-based coverage because the plans cost so much relative to salaries.

Employees who keep their coverage might see leaner take-home pay, which could hurt the economy.

Nolimal said one business client whose monthly premiums will rise from $160 to $340 in June plans to shift most of the increase onto his employees.

“Just like when you see gasoline prices going up an extra dime a gallon, it takes money out of the economy for things like buying a new stereo or having dinner out on the town,” Nolimal said.

It would be nice to live in a world where the basic laws of economics are not ignored in our analyses of policy. Unfortunately, that luxury is denied to us, which is why Obamacare will continue to be considered awesome-beyond-compare by the bien pensant community for the foreseeable future. But eventually, reality will come crashing down on the rest of us, the chickens will come home to roost, and even after warnings like the ones contained in this blog post, some people will actually have the nerve to look and act surprised.

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