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Implementing Obamacare is a train wreck nationally, but in California it's a high-speed rail disaster.
In the past few weeks we learned that health insurance giants UnitedHealth, Cigna and Aetna will opt out of California's health care exchanges. They will still provide health insurance through large employers but wisely avoided Obamacare’s complicated new framework.
In another hit to the left coast, many Californians need to trade in their Cadillac plan for a backfiring Yugo. State leaders claim that more people will be insured, but benefits will be cut and the network of providers reduced.
More recently it was revealed that the "Affordable" Care Act will drastically increase the insurance premiums of millions of Californians. Young residents who buy insurance for themselves will see their already high insurance premiums double.
When politicians see their good intentions collapse into a swamp of red tape, you’d think they might consider a course correction. But instead of learning from their mistakes, state leaders are screaming, “go faster!”
Since Obamacare mandates that businesses give expensive new benefits to full-time employees, many companies simply converted many of their positions to part-time. Everyone with an ounce of common sense predicted this move, yet it came as quite the shock to Sacramento.
But have no fear — the Golden State's "regulate first, ask questions later" lawmakers have created a cunning plan to teach those businesses a lesson. The legislature is working on a bill that would levy a fine of up to $6,000 on employers for every full-time employee that ends up on the state’s version of Medicaid.
Sonya Schwartz, program director at the National Academy for State Health Policy (yeah, that’s a thing) says, “There are concerns that employers will be gaming this new system and taking less and less responsibility for their workers. This may make employers think twice.”
That’ll show ‘em! But, hold on a second. Like the original Obamacare language, this new law only applies to full-time employees. You know, the positions businesses have already converted into part-time slots. So this exciting new bill just repeats the same counterproductive penalties Obamacare created in the first place.
To sell this turd sandwich to the masses, Cali liberals are claiming that the real bad guy in all this is Walmart. Rick Ungar, the self-described “token liberal” at Forbes, is gleeful over the possibilities to stick it to the retail giant. Unger is the author of the popular articles, "Walmart Pays Workers Poorly And Sinks While Costco Pays Workers Well And Sails," "Walmart Bails On Obamacare-Sticks Taxpayers With Employee Healthcare Costs," and "Walmart Drowns Puppies in Barrels of Koch Brothers Oil" (I might have made that one up).
According to Angry Mr. Ungar:
For years, Wal-Mart—and other large retail operators—have been piling up huge profits by controlling their labor costs through paying employees sub-poverty level wages. As a result, it has long been left to the taxpayer to provide healthcare and other subsidized benefits to the many Wal-Mart employees who are dependent on Medicaid, food stamp programs and subsidized housing in order to keep their families from going under.
With Medicaid eligibility about to be expanded in some 30 states, as a result of the Affordable Care Act, Wal-Mart has responded by cutting employee hours—and thereby wages—even further in order to push more of their workers into state Medicaid programs and increase Wal-Mart profits. Good news for Wal-Mart shareholders and senior management earning the big bucks—not so good for the taxpayers who will now be expected to contribute even larger amounts of money to subsidize Wal-Mart’s burgeoning profits.
Burgeoning profits! Cutting hours! Sub-poverty wages! Despite the overwrought jargon, the California bill only exacerbates the problem it claims to fix. When government punishes job creators, fewer jobs are created. When government attacks profit makers, fewer employees get paid. And when lawmakers actually do land an anti-business punch, the costs are passed to you and me, the consumer.
Sacramento boasts of their trendsetting policies with the line, “first California, then the nation.” Let’s pray that this high speed train wreck goes off the rails before it leaves the Golden State.
Follow Jon on Twitter at @ExJon.