Don’t Blame The Victims of Obamacare

There will be an attempt, and probably a concerted effort, to attack as selfish and even unpatriotic people who do not wish to participate in Obamacare.  If people choose to behave rationally and react to perverse incentives, expect the Left to cry foul.

But as long as the wrong-headed and unjust law continues to remain in effect, all of us, one way or another, will be forced to endure the consequences. The only questions are how we can protect ourselves from it, and how much blame we’re willing to accept for the damage it causes. 

Predictably, we’re now seeing it more: leftists are blaming corporate greed for employers cutting hours and changing operations in response to Obamacare. But as young people refuse to waste their money on the overpriced and overly restrictive Obamacare insurance, they too will come under attack.

UPS will be dropping some spouses from the health insurance plans of 15,000 employees, saving $60 million per year. The company is doing that as a direct result of a specific provision of Obamacare and a decision by the IRS that the definition of “affordability” for employer-run plans includes only the employee, not the employee’s family.

But according to the memo announcing the move, 

We believe your spouse should be covered by their own employer — just as UPS has a responsibility to offer coverage to you, our employee.

Spouses not offered coverage by their own employer will continue to be eligible.

That doesn’t sound like greed. That sounds like a company responding to government incentives. As Ben Domenech wrote in The Transom Friday, (lightly edited):

Professor Richard Burkhauser at Cornell figured this all out almost two years ago – along with the possibility that this will lead to all sorts of impacts on employers down the line. So the IRS had to rule on the issue. They did so in January, and they opted for the “more fiscally responsible but less coverage” option – but one which angered liberals, because they knew it would lead to more workers receiving individual-only coverage.   

Companies have a legal responsiblity to their shareholders to maximize return on investment. The board of UPS could be sued by shareholders for failing to take advantage of all means to maximize return, and $60 million per year is not an amount that can be ignored.  

Unfortunately for the purveyors of the “corporate greed” spin, universities, school districts, local and municipal governments across the country are also dropping employees down to part time status to avoid penalties associated with Obamacare. These entities are not subject to “corporate greed”, being government organizations. 

This is all par for the course: leftists push a policy such as the minimum wage or a tax increase. When it is implemented, the market reacts in ways that are utterly predictable, but also in other ways that are unforeseen, in an attempt to maximize efficient use of scarce resources. Leftists then blame the market players, especially for the unintended consequences.

Avik Roy writes in Forbes about one such dislocation, at Delta Airlines, which is looking forward to paying an additional $100 million next year, when Obamacare kicks in.  

Individual young people are going to be assailed as irresponsible or as not caring about their fellow man for refusing to buy overpriced health insurance. 

Even with the Obamacare subsidies, if they’re available, the price for a policy with a deductible may be in the neighborhood of $150 per month. Why should a young person use their last $150 every month to pay for insurance, when all that it may buy them is $10 worth of contraception? When they go to the doctor, they still have to pay 40% of their bills, up until their $3250 deductible is met. Most of them won’t ever meet the deductible — but they still have to pay the premium. It’s not rational. 

For those who can afford it and have the medical expenses to justify it, health insurance is a useful way to pay ahead on medical costs. But if you can’t afford it and don’t often get sick, don’t accept being labeled as irresponsible. Save your money. It makes no sense to pay for something you probably won’t use when you can opt in after if you need to. 

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