Thursday, November 3, 2011

Liberals Admit: More Companies Will Drop Coverage

A profile by NPR yesterday noted that the recent decision by the nation’s largest private sector employer to scale back benefits for its employees was symptomatic of a larger trend:

Wal-Mart’s recent decision to cut benefits for new, part-time employees may be part of a trend, as companies grapple with higher health costs.

That’s the view of John Rother, the new president of the nonpartisan National Coalition on Health Care, who chatted with All Things Considered host Robert Siegel about the country’s growing pack of part-time workers and why companies are rolling back their benefits.

“We’re seeing health costs becoming a larger and larger expense item for companies,” Rother told Siegel. And that poses a particular problem for firms “engaged in international trade, where they’re competing against companies that do not have to bear that expense.”

According to a transcript of the interview, Rother, formerly a senior lobbyist for liberal advocacy group AARP, admitted that “there’s no provision [in Obamacare] to require employers to cover part-time” workers.  And because firms are not subject to penalties under the employer mandate for not covering full-time workers, companies have an incentive to scale back benefits if they do provide coverage to part-time workers, and/or shift hiring from full-time to part-time employment.

Some may claim – as Wal-Mart did – that rising costs, and not the health care law, are the cause for these changes.  But remember that candidate Obama repeatedly promised that he would lower premium costs by an average of $2,500 per family, and do so in his first termSo in reality, Obamacare’s failure to deliver on its promises to lower health costs and insurance premiums is resulting in employers scaling back coverage for millions of workers and their families.

Last week, former Speaker Pelosi admitted in an interview that one goal of the health care law was to “emancipate” employers from health care costs, providing them with “a way out.”  Yesterday’s NPR story illustrated how quickly firms are taking advantage of that opportunity.