This spring, at an April 30th press conference, NBC’s Chuck Todd asked President Obama about concerns regarding the effects of Obamacare, and the president insisted that any concerns should be limited to those who are now uninsured, and so who might have access to new benefits even if they would also be subject to new rules. People who were already insured did not need to be worried. He said:
So there are a whole host of benefits that — for the average American out there, for the 85 to 90 percent of Americans who already have health insurance, this thing’s already happened, and their only impact is that their insurance is stronger, better, more secure than it was before. Full stop. That’s it. Now they don’t have to worry about anything else.
This claim was always pretty absurd on its face. The law’s blunt cuts to Medicare, which come without a reform of the system that could allow it to function much more efficiently, are predicted (by the administration’s own actuaries) to yield serious access problems if they are actually allowed to take effect; the vast increase in the Medicaid population without a commensurate increase in the supply of medical services available to Medicaid beneficiaries looks likely to do the same; and new insurance rules, taxes, and mandates will have major effects on the entire private insurance market.
The last few days have brought fresh evidence on the latter front, and suggested that controlling the conversation about Obamacare in the lead-up to the implementation of its major provisions may not be as easy as the administration had hoped.
First, the changes that large employers are making to employee health coverage have been getting some attention. The big story this week involved the decision by UPS to drop coverage for the spouses of thousands of employees because those spouses are eligible for some insurance coverage from their own employers. The company’s announcement specifically attributed the change to Obamacare, noting that “this change is consistent with the way many large employers are responding to the costs associated with the Health Care Reform legislation.”
And they were right. Yesterday, Erick Erickson of RedState posted a letter he had obtained which was sent by the vice president for human resources of Delta Airlines to an HHS official. The letter, which appears to be a follow-up to a meeting between HHS and some large employers in June, describes in detail the numerous concerns that large employers have about how Obamacare will affect their insurance arrangements and costs, and notes that the assorted taxes and mandates will cost Delta—which has long provided coverage to its full-time employees and will continue to do so—tens of millions of dollars next year, and require a variety of cutbacks and changes in the coverage the company offers its workers.
Also yesterday, the University of Virginia announced it will respond to these pressures much as UPS will. “Starting Jan. 1,” the university told its employees, “spouses who have access to coverage through their own employer will no longer be eligible for coverage under U.Va.’s plan.” And they, too, made the key reason plain: “Provisions of the federal Affordable Care Act are projected to add $7.3 million to the cost of the University health plan in 2014 alone,” the university’s statement asserted.
And large employers are not alone. Recent weeks have seen some troubling news for small employers—even (in fact, especially) in Massachusetts, which was supposedly the model for Obamacare. And yesterday (it was a long day for Obamacare) came some new evidence of big-labor unhappiness. The AFL-CIO of Nevada passed a resolution demanding that its members be allowed to keep the insurance coverage they have, which is set to be made untenable under Obamacare. “[O]ur union members and their families originally offered strong political and moral support for the promise of the Affordable Care Act,” the resolution stated. But because of the law’s definition of full-time work and because the unions have been unable to get the administration to exempt union plans from the law’s insurance rules, “the unintended consequences of the ACA will lead to the destruction of the 40 hour work week, higher taxes and force union members onto more costly plans.” These “unintended consequences” were of course plainly evident before the law was enacted, but the union apparently assumed they wouldn’t apply to core Democratic constituencies.
Or maybe they’ve simply lost track of who the Democratic Party’s core constituencies really are now. “The Congress and the Administration have demonstrated they have the authority and power to make dozens of other corrections to the ACA, including taking care of big business and well-paid Congressional staff members,” the resolution continued, “but have yet to provide our unions with any relief to allow our healthcare plans to continue as they have for over 65 years.”
Unhappiness among large and small employers is obviously a political problem for the administration, but this kind of turn against Obamacare by big labor could be a much bigger headache in the near-term. Particularly in non-presidential election years, which tend to lack the sort of intense interest and enthusiasm that drives devoted partisans to volunteer for turnout efforts, the Democrats depend enormously on big labor for some essential get-out-the-vote mechanics.
And the Nevada resolution was by no means the first or biggest sign that Obamacare might undercut the unions’ usual willingness to help. Last month, the national presidents of three major unions—the Teamsters, the United Food and Commercial Workers, and UNITE-HERE (which represents many food-service, hotel, and other hospitality workers)—wrote a letter to Harry Reid and Nancy Pelosi arguing that, without significant changes, “the ACA will shatter not only our hard-earned health benefits, but destroy the foundation of the 40 hour work week that is the backbone of the American middle class.” And they, too, did not fail to notice who was and was not getting help from the administration, writing:
Since the ACA was enacted, we have been bringing our deep concerns to the Administration, seeking reasonable regulatory interpretations to the statute that would help prevent the destruction of non-profit health plans. As you both know first-hand, our persuasive arguments have been disregarded and met with a stone wall by the White House and the pertinent agencies. This is especially stinging because other stakeholders have repeatedly received successful interpretations for their respective grievances. Most disconcerting of course is last week’s huge accommodation for the employer community—extending the statutorily mandated “December 31, 2013” deadline for the employer mandate and penalties.
Time is running out: Congress wrote this law; we voted for you. We have a problem; you need to fix it. The unintended consequences of the ACA are severe. Perverse incentives are already creating nightmare scenarios.
The administration’s own nightmare scenario is that these concerns will explode into the open at the AFL-CIO’s fall convention in September. There is no easy solution to the unions’ problem within the boundaries of the law, but we have already seen in recent months that the administration is perfectly willing to push those boundaries in a variety of ways to meet its immediate political needs. Don’t be surprised if the unions get a break through another act of unilateral executive-branch legislation in the coming month.
If the Obamacare coalition can’t hold on to the unions and the professors, pretty soon it’ll be down to just journalists.