How Obamacare Helps Employers Game the System



When big, important laws like Obamacare are first debated and later discussed after passage, you typically hear a lot about what will happen under the law. But fairly often, descriptions of what will happen are actually just descriptions of what someone hopes will happen, or perhaps intends to happen.

For example, think of the law's "employer mandate." Prior to the health law's passage in 2010, and in the years since, we heard quite a bit about what the provision would do. The reality turns out to be somewhat different.

In 2009, for example, President Obama explained that, under the law, "businesses will be required to either offer their workers health care, or chip in to help cover the cost of their workers." Employers, he argued, needed to do their part. "We can't have large businesses and individuals who can afford coverage game the system by avoiding responsibility to themselves or their employees," he said.

In a speech last year, Obama explained the provision again. He also responded to a possible objection about the employer mandate.

"Now, some folks say, well, that's not fair," Obama said. "But if you are an employer, you can afford to provide health insurance, you don't, your employees get sick, they go to the emergency room or they end up on Medicaid because you're not doing what you're doing—you should be doing—why is it everybody else should be bearing those costs?"

That's a good question. Obama might want to dwell on it a little bit further—because, as it turns out, some employers appear to be responding to the mandate by finding ways to enroll employees in Medicaid coverage.

As The Wall Street Journal reports today, benefits consultants are instructing large employers about ways to avoid both penalties for not providing coverage and the cost of coverage itself. 

The Medicaid option is drawing particular interest from companies with low-wage workers, brokers say. If an employee qualifies for Medicaid, which is jointly funded by the federal government and the states, the employer pays no penalty for that coverage.

And when that happens, as Obama said, "everybody else" ends up bearing those costs.

…Such maneuvers could fuel controversy. Big employers with significant Medicaid enrollment in their workforces have been a political flash point in some states. The health law aimed to expand Medicaid eligibility to most people with incomes at or below 138% of the federal poverty level, but not all states have adopted that standard.

"We've got to be careful about not fooling ourselves into thinking everybody wins," said Matt Salo, executive director of the National Association of Medicaid Directors. "The cost to the taxpayer does go up significantly."

BeneStream said its business is growing rapidly. "The economics of this are what's driving change," said CEO Ben Geyerhahn. The law "created this as a valid waiver" for employers.

In addition, the Journal reports that employers are also finding ways to offer "skinny" health insurance plans that meet the health law's requirements but offer narrowly limited coverage.

The point is this: Here we have a requirement that was sold on the basis that it would force employers to chip in for worker coverage, that it would keep employers from shifting costs onto taxpayers via Medicaid, and that it would prevent employers from gaming the system. Instead, it is doing the exact opposite of all of these things. The law is creating an opportunity for employers to avoid paying for coverage by shifting them onto Medicaid. It is helping employers game the system. 

That's not what was intended to happen. But it's what is actually happening. 

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  1. Screw the common folk, help the crony businesses. Wait, I thought that was the Republicans.

  2. Another reason we need single-payer.

    1. “Medicaid for all!!!!”

    2. Where is all of the “socialize costs, privatize gain” complaining from the left about health care like there is about crony capitalism?

      Whether the gains are huge and concentrated, like government subsidies to corporations, or small and widespread, like the ACA, it still is socializing the payments to privatize the benefits.

    3. I had a single payer plan — me. I would have been glad to keep it.

    4. So who pays under single payer for those who don’t pay? The same folks who pay now. Tell me what I get for single payer that I didn’t have before?

      1. The knowledge that you are better than other people just for supporting it. You also get the benefit of being More Like Europe, which makes you not only better but more civilized to boot.

  3. I would say that reasonably-forseeable consequences are for all practical purposes, *intended,* even if they fool themselves with rosy scenarios and arbitrarily ignore evidence and common sense.

    A subjective feeling of benevolence, unsupported by realistic evidence, should not be enough to count as good intent.

    1. I get really tired of hearing the phrase “unintendwd consequences” in relation to ObamaCare. They knew, or should have known, what a clusterfuck this bill would be.

      1. *unintended

      2. How could they have, if they didn’t even know what was in it before they passed it?

        Well, OK, good point. I suppose that alone would have been enough information to out it as an utter clusterfuck.

  4. But if you are an employer, you can afford to provide health insurance, you don’t, your employees get sick, they go to the emergency room or they end up on Medicaid because you’re not doing what you’re doing?you should be doing?why is it everybody else should be bearing those costs?

    Greatest. Communicator. Since. Reagan. EVAR

    1. Because the primary function of a business is to provide their employees with health insurance. derp

    2. Oh, lighten up, seguin. The Prez is jus’ bein’ folksy.

    3. Lighten up, Francis. The teleprompter slipped a gear.

  5. “That’s not what was intended to happen. But it’s what is actually happening.”

    Does anyone actually trust Obama when he says this wasn’t the ultimate intent? Seems like it would be easier to push for a single-payer system if a significant portion of the population has been pushed onto Medicaid by their company.

    1. I think Riven has exactly right – I’ve believed all along that the single payer system is really their intent.

      1. I remember some progressives during the Obamacare debates stating, on Facebook or in private conversations, “But the individual mandate is the compromise!”.

  6. “But if you are an employer, you can afford to provide health insurance, you don’t, your employees get sick, they go to the emergency room or they end up on Medicaid because you’re not doing what you’re doing?you should be doing?why is it everybody else should be bearing those costs?”

    This is the perfect archetype of Obama’s unscripted speaking. A rambling, incoherent collection of buzzwords aimed at a chimerical villain.

  7. That’s not what was intended to happen. But it’s what is actually happening.

    “We never claimed it was a perfect law!”

    1. “Just let us pass a few more to fix those problems and then everything will be perfect though.”

      1. The real problem is that Republicans have sabotaged it. That, and that we haven’t spent enough money on it. Triple the budget and you will see the savings start to roll in!

  8. Hi peter,

    Maybe we should set up a health care system where if someone goes to the doctor’s office or hospital they get medical care.

    1. Or, maybe, we should set up an economic system where those who are rendered services are the one’s solely responsible for paying for them?

      1. Fuck you poor people. Can I just easily dismiss all this compassionate conservative blather about how limiting government is really about helping out poor people. It’s always sounded like horseshit to me.

        If you are poor and you are voting for Republican conservatives because you think you are sticking it to elitist liberals, or that the government is coming for your guns, or you don’t like abortion, or you hate that a Black person is President then YOU.ARE.A.FUCKING.IDIOT.

        1. american socialist|10.22.14 @ 7:50PM|#
          “Fuck you poor people.”

          Hi dipshit! I’m sure you were thrilled with all the poor people killed by your fave mass murderer, right dipshit?
          Oh, and get fucked with rusty implements, you racist asshole.

    2. Or better yet, one where you dead beats get to steal/force labor out of nurses, doctors,etc.

      1. Oh yeah, and if you worry about something like stealing labor from nurses that get paid 100k/yr and doctors that get paid multiples of that while your kid is getting health care then you are an idiot too and probably listen to a bit too much Glenn beck.

        1. american socialist|10.22.14 @ 7:54PM|#
          “Oh yeah,”

          Hi, dipshit! We should rely on slimy bastards like you to define who should get paid what?
          Fuck you. I wouldn’t piss on you if you were on fire, asshole.

          1. We shouldn’t let the Medical Labor Union (AMA) write the laws and limit the supply. It shouldn’t cost two hundred dollars to get a permission slip to buy ten dollars worth of medicine.

        2. So if they make enough stealing is ok? I suppose that makes sense coming from somebody who stuck the rest of us with his mortgage. Get a job dipshit.

    3. american socialist|10.22.14 @ 12:38PM|#
      “Hi peter,”

      Hi dipshit.
      Maybe you should have paid your mortgage instead of dumping it on us.

    4. Yeah, like where you would pay individuals or groups for goods and/or services provided on the basis of terms negotiated between yourself and the vendors.

      We could call it a “free market”.

      1. Yay… Kidney transplants for rich nonagenarians. Good luck getting health care for your kid with cancer if you are making minimum wage. Well, there’s always charity care and your church like dr. Ron Paul was suggesting. Can I get a “vhat a country”

        I was sitting in my medical benefits meeting today with my French co-worker. She was baffled. In France, apparently, they just go to the doctor and get medical care. What a fucked-up system that is!

        1. american socialist|10.22.14 @ 8:00PM|#
          “Yay… Kidney transplants for rich nonagenarians”

          Hie, dipshit! May you need a transplant and die because someone bought it for more money than you have.
          Slimy bastard.

        2. Wow. You mean, you work for an employer who gives you benefits? That’s rough.

          My paperwork is usually simple: I hand the doctor one of my credit cards, and he puts whatever he needs on it. Then, I pay the bill. If you can do it, I’d recommend it.

          But, hey, maybe one day, uncle sam can put your medical bills on my credit card, too. That way, your trip to the doctor can be simpler. That’s all that matters, right? In fact, now that I think about it, I don’t see why that isn’t the solution to practically everything: just make someone else pay for it, so it’s simpler. What could go wrong?

          1. Well, your a rich guy, Brian. The system you prefer works for you because you have 100k to blow if something happens to your heart. I don’t have that kind of money. Maybe I should go to my church– The Atheist Alliance– and hit them up to pay for my clogged artery. I bet that would work out.

            By the way, Uncle Sam does put people’s medical bills on your credit card. It’s called Medicare. I want the Republican Party to call for abolishing that program– although probably for different reasons than you.

          2. “The French health care system is one of universal health care largely financed by government national health insurance. In its 2000 assessment of world health care systems, the World Health Organization found that France provided the “close to best overall health care” in the world.[1] In 2011, France spent 11.6% of GDP on health care, or US$4,086 per capita,[2] a figure much higher than the average spent by countries in Europe but less than in the US. Approximately 77% of health expenditures are covered by government funded agencies.[3]”

            From: http://en.m.wikipedia.org/wiki/Health_in_France

            Those poor saps don’t know how good people without insurance have it in the greatest country on Earth.

        3. :I was sitting in my medical benefits meeting today with my French co-worker. ”

          I thought you were a rich, multi business owner, start up guru ? Not a cubical dweller with co-workers ?

          1. “I thought you were a rich, multi business owner, start up guru ? Not a cubical dweller with co-workers ?”

            Oh, no! Commie kid offers to work for free, since that’s what he wants from everyone else, right, dipshit?

            1. Yeah, nurses working for 100k/yr are working for free.

  9. “But if you are an employer, you can afford to provide health insurance, you don’t, your employees get sick, they go to the emergency room or they end up on Medicaid because you’re not doing what you’re doing?you should be doing?why is it everybody else should be bearing those costs?”

    The Most Powerful Man on Earth is as dumb as a box of rocks.

    Congratulations, America.

  10. Because the primary function of a business is to provide their employees with health insurance.

    And hand out paychecks on Friday.

    That’s why they are referred to as “employers”. They exist solely to provide jobs and income to the masses.

    1. They are subcontractors for the Federal Government, used to pay out benefits that the feds don’t want to manage themselves.

      True, usually a subcontractor is paid for their services rather than having their income confiscated, but that is all covered under FYTW.

      1. I see you have been reading Das Leftoid!

  11. Can Reason please retire that Axis of Evil picture they use for their ACA articles? My blood pressure rises, and other parts of my body contract, just looking at it.

    1. +1 Botox Injection

  12. I’m having a “trauma” that is changing the way I think about the Federal Government. The original mandate of the Federal Government is to oversee the defense of the nation and it’s foreign relations. Since then, the feds have gotten into a lot of other things thru the decades of our history, such as health care, to mention the most current mess. I’m fast becoming an advocate of States Rights. We have 50 of them, and I’m beginning to believe that as screwed up as many of them are, they can probably handle the day to day affairs of the nation without interference from Washington, DC.

    They (The States) can do even better if they cooperate with each other more. Let the Governors and The States handle things, and the feds can be depended on to screw up foreign policy and defense anyway. By States Rights I mean that each state has the right to be as different as its’ voters choose. This means that each State of The United States can vote for or against the issues (Gay and Lesbian Rights, Abortion, and so on) as they choose to. They can really be “sovereign”, while the feds are already big enough as it is with foreign policy and defense. And while you are at it, move the Capitol of The U.S. to the Center of the Country (St. Louis), and make Washington, DC into a museum. Ha!

    1. The federal bureaucracy is by population the largest entity in the government, and it’s beholden solely to the smallest part of the government that’s actually elected. Every single agency you can probably think of is part of the Executive Branch, and the only real accountability there happens once every four years. I don’t need to tell you how far from representative the Presidential election process really is, so I’ll let you be the judge of the qualities you can expect from a hundred thousand bureaucrats answerable to one guy in DC who doesn’t really give a shit whether you’re happy with the IRS’s “customer service” or not.

      But people like AmSoc will tell us that six middle-managers and gentleman’s C’s in an office building in DC are better equipped to make choices for you than you are.

      1. No, I’d just tell you that I’d be happy to break up the arrangement and have california, Oregon and Washington go their own way. We’ve been paying for these red-stater limited government fantasies too long. It’s time for you guys to grow the fuck up and stop your constant fucking bitching. That’s really the worst part.

        I just got back from Croatia and Bosnia. Lovely places. And a model to emulate .

        1. american socialist|10.22.14 @ 8:13PM|#
          “No, I’d just tell you that”…

          Hi, dipshit. Please go back to Croatia and die, slimy bastard.

  13. The ACA creates two classes of people. One pays for their own healthcare (some will receive subsidy) and another will get it for free, if they can find hospitals that accept medicaid. Some sort of conflict is inevitable.

    ACA supporters are hoping that those paying for their insurance will turn green with envy and join the “medicaid for all” movement. Apparently, libs are ok with the notion that someone who earns 500,000 dollars a year can get healthcare scot free, sharing resrouces with the impoverished.

    Americans pay little to nothing into any healthcare system. No VAT, high gas prices, separate payment for a national healthcare system, etc. If you work, you contribute to medicare. If you’re unemployed, you’re scot free.

    You can’t say you want a socialized healthcare BUT refuse to accept increase taxes or cost. It’s not possible.

    1. Only rich people pay taxes, XM, haven’t you heard?

  14. Many employers simply convert jobs to part-time. Burdening full time employment with more and more regulations is killing it.

    (Ironically, that’s also the same thing that’s been happening to marriage: the legal obligations, risks, and complexities.)

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  16. My neighbor’s half-sister makes $75 /hour on the computer . She has been fired for eight months but last month her payment was $17951 just working on the computer for a few hours.
    visit.——– http://www.jobsfish.com

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