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Tuesday, Aug 19, 2014
Editorials

The Obamacare roller coaster

Published:

The Affordable Care Act’s threat to the economy is illustrated by this: The White House itself routinely chooses to ignore the law, and arbitrarily revises its provisions.

The administration seems to understand that once the law is fully enforced, it will kill jobs and chill enterprises, and wants to put off the economic reckoning as long as possible.

Yet supporters blissfully ignore these tacit acknowledgements of a looming disaster and insist all will be hunky-dory once Obamacare is fully implemented.

Don’t buy it. Instead of trying to refashion the law on the fly, President Obama should work with Congress on a comprehensive overhaul.

Last year the administration delayed for a year — until 2015 — the requirement that businesses with 50 or more employees offer health insurance or pay a fine. This week it added another year’s delay.

It also is allowing firms with 100 or more workers to offer health insurance for only 70 percent of full-time workers in 2015 and 95 percent in following years. This, though the law clearly mandates 100 percent.

The president also has ignored the act’s specific directives in providing delays on the mandate for individuals to buy health insurance and in allowing individuals to keep insurance that did not include the expanded coverage dictated by the law.

The administration is treating the law — not to mention the Constitution — with amazing elasticity, but its motives are understandable.

Just as critics warned, the overreaching law will kill jobs, increase costs and cause Americans to lose the health care coverage that works best for them.

Many small businesses will stop hiring additional full-time workers to avoid the 50-worker limit and the resulting penalties. Other businesses will simply drop employee coverage, leaving workers to find something on the exchanges.

As the Congressional Budget Office analysts found, wages are likely to be cut as businesses pass on the cost of any penalties or additional costs to workers.

Yet advocates continue to ignore the mounting evidence of the law’s damaging consequences.

It is interesting how Obamacare supporters spun the CBO finding last week that the law would cost the workforce 2.5 million jobs by 2024.

The nonpartisan agency found part of this would come from workers choosing not to work at all or to only work part-time because they would be able to obtain health insurance without a full-time job.

Supporters responded that since these people were choosing to leave the workforce, they shouldn’t be counted as job losses. The law, this argument goes, is actually liberating American workers.

No doubt, the access to coverage may benefit many individuals, but the costs involved in providing it will unquestionably eliminate jobs. And providing incentives for people to quit work is not the way to boost the economy.

University of Chicago economist Casey Mulligan discussed the impact with The Wall Street Journal last week: A job, he explained, “is a transaction between buyers and sellers. When a transaction doesn’t happen, it doesn’t happen. We know that it doesn’t matter on which side of the market you put the disincentives, the results are the same ... In this case you’re putting an implicit tax on work for households, and employers aren’t willing to compensate the households enough so they’ll still work.”

Mulligan is scornful of the idea that encouraging people to abandon jobs benefits the nation.

“Even before the recession there was too little work in the economy. Now all of a sudden we wake up and say we are glad that people are working less?”

The accumulation of such alarming economic facts about the Affordable Care Act does seem to be getting the administration’s attention. But its reaction, so far, has been to delay and dissemble. It’s probably too much to expect anything different.

If the president would candidly confront the health-care law’s failings, he could be credited with an act of memorable political courage, one that would merit the nation’s gratitude.

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