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NRO’s health-care blog.

The Red Tape Blues



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Employers are confused and fighting mad about the huge costs and paperwork burdens that will hit them as a result of Obamacare.

“We just need to know how much this is going to cost us,” one businessman said at a meeting of the Association of Washington Business in Blaine, Wash., on Wednesday.

But at this point, the answer is just not knowable, since regulators still have to write so many regulations, including what health services employers will be required to cover under mandatory insurance.

Other serious concerns:

— Grandfathering. Business leaders are angry they were deceived and won’t be able to keep their current health-insurance plans, which would let them at least postpone some of the new federal mandates and rules. Sen. Mike Enzi (R., Wyo.) has filed a resolution of disapproval to force a Senate vote over the Obama administration’s too-strict grandfathering rules under the Congressional Review Act. Senator Enzi seeks to use Senate power “to overturn regulations that were drafted in secret, and which would result in more than half of all Americans with employer-sponsored coverage losing their current plan by 2013 — less than three years from now.” The resolution won’t pass this year but expect to see it on the docket again next year.

● CLASS Ponzi scheme. Rep. Charles Boustany (R., La.) has responded to targeted businesses’ concerns about the CLASS Act, the long-term-care program created in the health-care law. In an article in Human Events, he writes that the law requires employers to automatically enroll all of their employees in the program unless a worker opts out through a federal application. The premiums are expected to cost $240 a month for workers and will add huge new paperwork burdens for employers.

● Mandated higher costs. Business leaders are looking at higher costs for the “free” health benefits that were the focus of a White House media blitz this week, including preventive care at no cost to patients, allowing parents to add their 26-year-old “children” to their policies, and no yearly or lifetime limits on insurance payouts.

The Kansas City Star weighed in: “It’s absurd for the administration to pretend those changes won’t result in increased risk for insurers, which has to be covered by premiums. ‘This is a refusal to accept the economic reality of what she [Secretary Sebelius] and the president have caused,’ said Cary Hall, president of Benefits by Design, an Overland Park insurance broker. ‘You cannot expect insurance companies to do these things and not see premium increases.’”

The cost hikes are coming — adding up to 14 percent to the cost of individual policies and 8 percent for group plans, according to some insurance industry estimates.

● Employers will drop coverage. An article from the BNA Daily Report for Executives shows employers are very skeptical about their ability to provide health insurance to workers over the medium or longer term:

“There are huge administrative compliance and cost burdens on employer sponsors,” said Jim Klein, president of the American Benefits Council in Washington. Klein participated in a webcast sponsored by accounting firm Ernst & Young LLP titled Health Care Reform: It’s the Law.

“The future of the employer-sponsored system as a result of a lot of that is very much sort of hanging in the balance, not in the short term, but clearly in the mid- to long term,” he said.

Over time employers may decide to stop offering coverage to employees because it will be cheaper to pay fines under the Patient Protection and Affordable Care Act rather than pay for the cost of health insurance, Klein said.

“Just looking at the numbers, the penalty is less than what it costs you to provide coverage to your employees,” Klein said. On the other hand, he added, “How long do you think that those penalties are going to remain at the level that they are?”

There is “a great deal of skepticism” among employers that the health care law “is in any way going to reduce their costs,” that “I think it’s almost inevitable that virtually no one will have a grandfathered [insurance] plan…”

● Polls that tell the story. Six months after enactment of the new health-care law, the U.S. Chamber of Commerce released a national bipartisan poll showing that nearly eight in ten small-business leaders expect their costs to increase as a result of the new law. Further, a majority say they will be less likely to hire new employees and more likely to reduce current health-care benefits.

“This poll shows that the very small business leaders who are being counted on to grow jobs are deeply unsettled about the present and concerned about the future, and a tremendous amount of that uncertainty is due to the new health care law,” according to Randy Johnson, senior vice president of labor, immigration, and employee benefits for the U.S. Chamber.

American Action Forum also has a new poll out, and it shows that people believe Obamacare will lead to significant changes in their health insurance, and a whopping 82 percent of them believe the changes will be for the worse. The poll listed a number of provisions in the law — including $500 billion in taxes and $500 billion in Medicare reimbursement cuts — and then asked people whether they support the law — 59 percent said they oppose the law, 50 percent of them “strongly.” And by a nearly two-to-one margin, people believe businesses will drop health insurance and dump their employees into taxpayer-funded coverage.

People are not misinformed about Obamacare. They know all too well what is in it! That’s why the chorus of voices demanding repeal continues to grow.



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