Friday, April 26, 2013

Fwd: qotd: ACA's negative impact on employment

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-------- Original Message --------
Subject: qotd: ACA's negative impact on employment
Date: Fri, 26 Apr 2013 06:09:30 -0700
From: Don McCanne <>
To: Quote-of-the-Day <>

The Washington Post
April 24, 2013
Governments may push workers out of employer health care and into health
By Associated Press

In a quest to save money, political leaders in Washington state are
exploring a proposal that would shift some government workers out of
their current health plans and onto the insurance exchange developed
under President Barack Obama's health care law.

Lawmakers believe the change, which could affect thousands of part-time
state employees and education workers, would save the state $120 million
over the next two years.

The Washington proposal has been advanced as a way to help deal with a
$1.2 billion budget shortfall. Under it, Washington state would make
policy changes and secure agreements in which staffers who work between
20 and 30 hours a week would get extra compensation but lose their
current health coverage. They would then be eligible to get health care
in the federal plan, without any consequence for the state.

"I think it's a great way to fully take advantage of the Affordable Care
Act," said Republican Sen. Andy Hill, one of the state's top budget writers.

While few states are following Washington's path at the moment, there
has been concern about how private employers will handle the new health
care law and the possibility that some may shed insurance coverage. The
owner of Olive Garden and Red Lobster restaurants, for example, began
experimenting last year with putting more workers on part-time status.

Virginia is doing something similar, with Republican Gov. Bob McDonnell
directing that all part-time state employees work less than 29 hours
weekly. That is creating a financially crippling problem for many of
Virginia's 9,100 adjunct faculty members at the state's 23 community
colleges on 40 campuses statewide.

"I've never anticipated getting rich off being a teacher," said J.
Gabriel Scala, an adjunct English professor at J. Sargeant Reynolds
Community College in Richmond.

"But the rent has to be paid. And I have to eat. And gas has to be put
in the car — and $17,000 a year isn't going to do it," she added.

Comment: One of the most important design features of the Affordable
Care Act was that the employer-sponsored sector of health care coverage
was to be largely left alone since allegedly it was functioning so well
- not only covering the largest sector of our population, but also an
important source of health care financing that was already in place.
What could possible go wrong with this strategy?

What are employers to think when they see that the two primary features
of the Affordable Care Act - the expansion of Medicaid and the
establishment of exchanges of private insurance plans - were to be
partially or completely financed with government funds? If lower-income
employees could be shifted into the exchanges, the federal government
would provide subsidies that would help fund the health care needs of
employees. The only condition is that the employee must be part time,
not working more than 30 hours per week.

Private employers have already begun to reduce their employees' hours to
qualify them for the exchange plans, and now we see that state
governments are considering the same approach.

The important point is that employees in this sector that was to be left
intact - those with employer-sponsored plans - are not only experiencing
changes in their health insurance coverage, they are also experiencing a
major loss of income due to the requirement of sharply limiting the
hours worked per week. Since many of these individuals already have very
low incomes, the cutback will be financially catastrophic.

It is really tragic that a program theoretically designed to expand
health care coverage is having such a negative impact on employment
itself. This would never have happened had we enacted a single payer
system. We still can, you know.

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