Most of the important provisions for consumers will go into effect as planned in January.
The Obama administration’s decision to postpone for a year the requirement that large employers offer health insurance to their workers has been characterized by pundits on the left as a capitulation to big business and on the right as the latest evidence that Obamacare isn’t working.
Actually, it’s neither, although the lefties have reason to be annoyed. Even so, I’m willing to cut the administration some slack on this one. The health care reform bill passed by Congress made implementation of the employer mandate unnecessarily complicated, for both employers and the administration, as former Obama health policy aide Ezekiel Emmanuel pointed out in a recent New York Times column. The House version of the reform bill, which would have required employers with 50 or more workers to contribute a portion of their payroll to covering their employees, would have been less challenging to implement than the Senate version that became law, which requires companies to offer coverage to employees who work 30 hours or more a week.
Although I believe employers — especially large ones — should feel an obligation to help ensure that all Americans have access to affordable health care, the reality is that the vast majority are already doing their part. CEOs of most big companies decided long ago that offering subsidized coverage is one of the easiest ways to recruit the best and the brightest.
According to the Kaiser Family Foundation, 98 percent of companies with 200 or more workers provide coverage, and 94 percent of those with 50-199 workers do. This means that the part of the reform law the administration is postponing until 2015 — the requirement that employers with 50 or more workers offer coverage — affects only a very small percentage of companies and between 1 million and 1.5 million people.
While it’s unfortunate those folks will have to wait an extra year before their employers offer subsidized coverage, it doesn’t mean that they will will necessarily be uninsured. That’s because of other, more important provisions of the Affordable Care Act that are still scheduled to go into effect January 1, 2014.
In less than six months, for instance, insurance companies will no longer be able to refuse to sell coverage to anyone because of a preexisting condition, and they won’t be able to charge someone who has been sick in the past — or born with a birth defect or chronic condition — more than anybody else.
Another important provision set for January 1 will prohibit insurers from charging people in their 40s, 50s and 60s more than three times as much as people in their 20s and 30s. Today they can charge up to five times as much and in some states as much as they want, which is why so many older Americans are counting the days until their 65th birthday when they will be eligible for Medicare. Many of them simply cannot afford to buy private coverage because of the discriminatory practices of insurance firms.
In addition, in less than three months, people who can’t get coverage through their workplace can shop for it in a way that finally makes sense. They’ll be able to buy it on the online marketplaces that every state and the District of Columbia must have up and running on Oct. 1. Gone forever will be the days when we couldn’t compare one health plan with another or figure out how much our out-of-pocket expenses might be if we get sick or injured or have a baby. Insurance companies will at long last have to provide us with information to enable us to do that — in concise language we can actually understand. Imagine that.
Also gone forever on January 1 will be an obstacle unique to America in the developed world — job lock. An untold number of Americans for all practical purposes are indentured servants in large corporations, locked into jobs they don’t like but won’t dare quit because of their employer-subsidized health coverage.
By making the discriminatory practices of insurance firms unlawful, which will bring to an end their ability to cherry pick only the policyholders they want — the young and healthy — the Affordable Care Act will give American workers the key to that lock.
I’m confident that this newfound freedom — taken for granted in every other developed country — will usher in an era of entrepreneurship and new business development, the likes of which we’ve never seen before. Our best and brightest will be able walk away from the jobs they’ve been shackled to and go into business for themselves or go to work for a smaller company — even one that doesn’t offer health care benefits — without fear of being uninsured.
The postponement of the so-called employer mandate, which won’t affect many employers in the first place, will not delay the end of job lock or the implementation of the long-awaited consumer protections that will go into effect in a few months. If it did, we’d have reason to march on the White House. It doesn’t. So let’s chill.
Wendell is a Senior Analyst at The Center for Public Integrity where this first appeared on 7/8/2013.