Sunday, June 16, 2013

The Shortcomings of the Affordable Care Act

No law is perfect and often fails to attain it’s mission.  The ACA is like that, however it does many things counter to common sense and reduces the reality of purchasing insurance other than a mandated program that is unaffordable, and/or punitive.

For some workers, health reform brings no coverage, fewer hours

A common story is unfolding such as that of McCoy Faulkner who collects $81 a day as a substitute teacher in the Wake County (N.C.) Public School System. A mere sub, he has no benefits.

The 62-year-old former Raleigh, N.C., police officer shells out $580 a month for an individual insurance policy, more than half his monthly pay. The full-time teachers for whom Faulkner fills in, however, are eligible for free health insurance, with no monthly premiums, through their employer.

That’s why Faulkner was looking forward to the Patient Protection and Affordable Care Act, figuring he was the kind of person that the health care reform law was designed to help. Under the new law, anyone who works 30 hours or more a week for a large business will be eligible for employer-sponsored health care.

But instead of adding subs like Faulkner to its health care plan, the school system is looking for ways to avoid doing so. Wake is considering restricting its 3,300-plus substitutes to working less than 30 hours a week, effective July 1.

The reason: If just a third of the system’s subs were to qualify for employer-sponsored insurance, it would cost Wake schools about $5.2 million.

Some businesses will restructure themselves to employ mostly, or only, part-timers.

It’s expected that some will opt for the fines. Nancy Adams, owner of two Piggly Wiggly grocery stores in North Carolina, said that’s one option under consideration for her business. The $2,000-per-worker fine would apply to just five full-time employees at the two stores, amounting to $10,000 a year, she said, because the law exempts the first 30 workers from the fine.

Adams said the company would save considerably and likely give workers a $2-an-hour pay raise to help them buy individual policies on a health care exchange. Such exchanges, created by the Affordable Care Act, are designed for those who buy coverage on their own.

Adams’ grocery business has 86 employees and currently provides insurance to 31 of them at a cost of about $120,000 a year. Insuring all those who work at least 30 hours would raise the cost to about $165,000, she said.

“We don’t have the pockets to pay an extra $45,000 for health insurance,” Adams said. “It’s huge.”.  And should opt in these costs will be passed along to consumers.

It becomes obvious that the results of Obamacare will have both direct and indirect increases for health insurance.


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