Expect More of the Same From Obamacare in 2014

When the Obama Administration quietly announced a year delay in the Obamacare employer mandate on the eve of the 4th of July, it came as a big surprise. But knowing what we do now about the nonfunctional nature of the healthcare.gov backend, it’s completely unsurprising that they delayed the employer mandate. In 2014, expect delays, waivers, and unconstitutional ad hoc changes to Obamacare and other laws to continue.  

The announcment of the delay in the employer mandate came in a blog post on an obscure Treasury blog, revealingly titled “Continuing to Implement the ACA in a Careful, Thoughtful Manner” (emphasis added):

The Administration is announcing that it will provide an additional year before the ACA mandatory employer and insurer reporting requirements begin.  This is designed to meet two goals.  First, it will allow us to consider ways to simplify the new reporting requirements consistent with the law.  Second, it will provide time to adapt health coverage and reporting systems while employers are moving toward making health coverage affordable and accessible for their employees.  Within the next week, we will publish formal guidance describing this transition.  Just like the Administration’s effort to turn the initial 21-page application for health insurance into a three-page application, we are working hard to adapt and to be flexible about reporting requirements as we implement the law.

As reported here when the story first broke, this was a sign the implementation was not going to go smoothly. The title revealed that the Administration knew the law was in trouble. The same problems we’ve seen with the rest of healthcare.gov were going to happen when employers tried to report which of their employees were insured on their plans and which were not.

An order of magnitude more people get their health insurance from their employers than purchase individual policies. Since these benefits are not taxed, insurers can charge more for their products than they could in a free market. That allows providers to charge more for their services, leading to the cycle in which some people believe they don’t have health care unless they have health insurance, so they look for employment that offers health insurance.

Had the Administration not cancelled the employer mandate for 2014, chaos would have reigned as the inevitable failure of the bureaucrat-designed systems hit employers. The IRS would no doubt have notified some taxpayers who knew they had employer-based insurance that they did not — adding a layer of confusion to the debacle of healthcare.gov. 

As 2014 draws to a close next fall, look for many more employers to decide that the $3000 fine for not providing health insurance looks attractive compared to the $5,000 to $15,000 they pay to cover their employees themselves. Many will dump their health plans, sending employees to the Obamacare exchanges. 

But here’s the problem: the Obamacare exchanges will still offer the same poor-quality insurance at prices that people can’t afford without subsidy. 

Employers may make a pact with their people: stay off the insurance, pay your relatively small fine, and I can afford to pay you more. But if even one of them uses the Obamacare exhange and gets a subsidy, the employer is on the hook for a $3000 Obamacare fine for each full time employee.

That’s only supposed to happen in states that have established their own exchange, not in states that rely on the federal exchange.  But the Obama Administration has already disobeyed the law, and starting in 2014 will assess these taxes in every state, regardless of exchange status.

The chaos is coming. It should be obvious to everyone, as it should have been last July 3rd, that Obamacare is an unworkable mess that should be repealed. But In 2014, we can look forward to one bright spot… 

In 2014, we get to vote.

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