Economy, Regs, & Taxes

By the Way, ObamaCare Is Killing Employer-Based Insurance

This isn't an "oops" side effect of Obama's health care plan -- it was the plan all along.

Sep. 4, 2014

When then-House Speaker Nancy Pelosi infamously declared in 2010 that Congress had to pass ObamaCare in order “to find out what’s in it,” who knew that the contra-factually named Affordable Care Act would be the unwanted gift that just keeps on giving (or, rather, taking)? Well, actually, everyone who opposed the bill knew – and warned against it. But it’s become increasingly obvious that even the ObamaCare-loving Democrats knew. Only they lied about it. And that’s putting it nicely.

According to Ezekiel Emanuel, a former White House special adviser on health policy who was in the inner circle of designing ObamaCare, 80% of employer-provided health coverage will be gone within the next 10 years. And according to research by S&P Capital IQ, that number will be closer to 90%. This isn’t an “oops” side effect of Obama’s health care plan – it was the plan all along.

Of the disappearing health plans, Emanuel said, “It’s going to actually be better for people. They’ll have more choice. Most people who work for an employer and get their coverage through an employer do not have choice.” Of course, what he leaves unsaid is that Barack Obama’s White House firmly believes the government knows what’s “better” for Americans more than Americans do.

Recall, if you will, that Obama criticized a Republican health care proposal during his first campaign, arguing it “would lead to the unraveling of the employer-based health care system. That I don’t think is the kind of change that we need.” Then again, he also repeatedly said, “If you like your plan you can keep you plan.” And we’ve all seen how well that turned out.

Alas, a lot can happen between campaign promises and government takeover. And politicians developing a penchant for truth-telling typically isn’t one of them.

The reason so many employer-based plans will be going the way of Obama’s campaign promises is, under ObamaCare, companies pay a $2,000-per-employee penalty for not providing a government-approved health care plan – far less than the cost of actually providing coverage. But that’s okay, supporters argue, because those who lose their employer-provided coverage will be dumped into the ObamaCare exchange. Of course, that’s exactly where Democrats planned for them to be all along – a government run health care system with “more choices,” as long as those choices are within the limits of what the government deems Americans should want to choose. It’s for your own good.

That truth made it all the more laughable when Obama declared this week, “[P]eople want more control over their lives, not less.” He’s the one taking that control away.

This isn’t to say employer-provided insurance plans are perfect. Written into our tax law for the past seven decades is a provision (born from Word War II wage freezes) that gives tax preference to employer-provided insurance, making the cost of the insurance deductible for employers and not counted as income for employees. The problem, as political analyst Michael Barone points out, is this: “High-earning employees with gold-plated, employer-provided health insurance get deductions that are worth many thousands of dollars. Those without employer-provided health insurance, or low-earners who are among the 40 percent of earners who do not pay income tax, get exactly zero.”

In another column, Barone notes, “A freer market in health insurance means eliminating this tax preference, presumably through a tax credit for those purchasing health insurance on their own.”

This is what Sen. John McCain suggested in 2008 when Obama accused him of yanking the string to unravel employer-based coverage. Which brings us exactly to where we are today thanks to ObamaCare: the unraveling of employer-based coverage, only this time, dishonestly and covertly.

As imperfect as this coverage may be, it’s undoubtedly better than the debacle we are only really beginning to suffer, and eliminating employer coverage is hardly how Obama billed his plan. Then again, his advertising isn’t known for accuracy. Far truer were the warnings that from the beginning ObamaCare was little more than a Trojan horse for a single-payer system. Just watch out. As things on the health care front get even worse, the Left will undoubtedly swoop in with the “real” fix. Forget Greeks bearing gifts. Beware of Democrats bearing promises.

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