Sunday, May 26, 2013

Robert Saumuelson's ObamaCare Journamalism

If you read Samuelson's column, you know that he's not particularly interested in analyzing the issues of the day, so much as he is interested in advancing a specific, right-wing economic agenda. But he could at least make an effort, couldn't he?
To get some answers, I recently talked with the heads of four “professional employer organizations” (PEOs) — these are companies that act as “human resources” departments for small companies. They provide payroll services and advise on fringe benefits and government regulations. Their customers include construction companies, restaurants, small manufacturers and professional firms. Many of these firms are only now coming to grips with the ACA, because they’d assumed that the Supreme Court would invalidate it or that a Republican White House would repeal it.
That's the first place I would look for answers about the PPACA - a bunch of consultants who were apparently happy to reassure their clients, "Don't worry about ObamaCare because it will be repealed or overturned," or who knew better but were not sufficiently competent to convince their clients to prepare for the possibility that they might actually have to follow the law.
To encourage candor, we talked on a not-for-attribution basis.
As if they would own up to that level of incompetence and then speak with Samuelson on anything but a "not-for-attribution basis".
First, some companies now providing insurance are being hit with huge premium increases. Before Obamacare, said one PEO adviser, his clients typically received annual increases of 6 percent to 12 percent. “This year we’re seeing 30 percent rate hikes,” he said. The surge is blamed, rightly or wrongly, on the ACA’s requirement for more comprehensive coverage and on its formula for calculating premiums (aka “community rating”).
Seriously? Is it that the incompetence of the consultants who spoke with Samuelson reached beyond their failure to advise their clients to prepare to comply with the law, and extended into not even knowing the basic economics of health insurance and premium costs? Or is it that Samuelson didn't ask the obvious follow-up question, "Which is it - rightly or wrongly?" To be fair to Samuelson, I think he knows the answer, but if he said it out loud ("wrongly") his three-point list would as a consequence have only two points.
Second, most companies haven’t made final decisions. Those who have go both ways. Another adviser described a 250-worker car dealership with good wages but no health insurance; it will provide coverage and cut wages to help pay costs. Another example involved a 60-worker manufacturing firm with wages of $12 to $15 an hour. It offered bare-bones policies with steep deductibles. Confronting higher premiums for expanded coverage, the owner will drop insurance. He found the ACA “too complex,” said this adviser.
Should we assume at this point that we're talking about a cause of higher premiums other than those that employers rightly or wrongly attribute to ObamaCare? If so, it's pretty much a given that some employers will choose to drop insurance, pay the penalty, and let its workers seek coverage through the exchanges. They're probably better off than with the "bare-bones policies with steep deductibles" (i.e., "crap") policies Samuelson says their employer previously offered - I think it's safe to assume that Samuelson has a gold-plated Medicap plan on top of his own, government-paid, comprehensive Medicare benefits - the workers who need adequate insurance may be better served by their employer's choice. But seriously? The consultant who is paid to make the process as simple as possible for a client employer can't get his client past, "It's too complex"? And that would be the fault of... somebody other than the consultant?
Third, many firms are revising their business models to minimize insurance costs. One favorite idea: Hold workers below the 30-hour weekly threshold requiring insurance. Many part-time employees who work more (say, 35 hours a week) will lose hours.
I've heard about this little scheme, as well. The fixes are so obvious (e.g., setting the penalty based upon total employee hours) that the only reason that it's worth discussing is that people like Samuelson anticipate that Republicans will filibuster any effort to implement a fix. But you know what? It may not amount to much. When an employee is given a choice between working two jobs because his employer won't give him more than thirty hours, and working one job with decent health benefits, guess which job anybody worth hiring is going to choose?

If Samuelson had any experience working in an environment where employees earn at or near minimum wage, he would have some appreciation for how little it takes to convince an employee to change jobs. Samuelson wouldn't notice fifty cents an hour. Were he making $7.25 per hour, it would become a big deal. If you want to run the business with employees who don't mess up orders, don't waste food, are less likely to steal, are easier to train and supervise, etc., as a general rule you have to pay a bit more than the guy down the street. If my competitor in food service were intent on keeping his employees below thirty hours a week, I would be happily skimming the cream off of his workforce.
Another adviser mentioned a client, an engineering firm with 48 workers, that had deliberately restrained expansion.
This is where I make a coughing noise that sounds a lot like I'm actually saying "bull****". If this engineering firm truly is constraining its size to avoid giving its employees decent health insurance, it's not going to have much luck retaining engineers. They have even better options than the movie theater worker and hotel workers whose anticipated plight was, mere moments ago, giving Samuelson such... is the word, delight?

I would suggest that Samuelson stop "concern trolling" ObamaCare and propose some meaningful solutions, but... as I suggested up front, I see no evidence that he's interested in solving the problems ObamaCare is attempting to address.

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