This gets tiresome. Three years ago, I predicted, based on the Massachusetts experience with Romneycare, that mandatory healthcare without extensive subsidies would make healthcare unaffordable for too many people. And so it goes:
The problem seems to be the way the law defined affordable.
Congress said affordable coverage can’t cost more than 9.5 percent of family income. People with coverage the law considers affordable cannot get subsidies to go into the new insurance markets. The purpose of that restriction was to prevent a stampede away from employer coverage.
Congress went on to say that what counts as affordable is keyed to the cost of self-only coverage offered to an individual worker, not his or her family. A typical workplace plan costs about $5,600 for an individual worker. But the cost of family coverage is nearly three times higher, about $15,700, according to the Kaiser Family Foundation.
So if the employer isn’t willing to chip in for family premiums — as most big companies already do — some families will be out of luck. They may not be able to afford the full premium on their own, and they’d be locked out of the subsidies in the health care overhaul law.
This was not only predictable, it was predicted. And, no, I’m not happy about being right.
Employers are finding out that the ‘chipping in’ on family premiums is to their best interest. We all heard about John Schnatter (the $1.2B small business owner) and individual fast food franchisee’s who complained that ‘ObamaCare’ would drive them out of business. The din has faded though, as these ‘job creators’ sit with their accountants and quietly find out that the tax incentives they receive not only negate the cost of co-premiums, but actually get them further tax benefits in the long run. So, you’re still right, but we will see more and more employers continuing to offer healthcare because to lose those incentives by not doing so simply is not good business sense. The subsidies just fall to the employers, not the consumer directly.