Employer mandate delay confirms Obamacare doesn’t work

Benjamin Domenech Research Fellow, Heartland Institute
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In the immediate aftermath of Chief Justice John Roberts’ decision to uphold the individual mandate, I was asked by a reporter what the decision meant for the future of Obamacare and its legal status. Simple, I said: to remain the law of the land, all it has to do is work.

It doesn’t even need to work perfectly — it just needs to deliver generally on the president’s promises to lower premium costs, offer better coverage, offer better access to care, cut the deficit, and not disrupt the portions of the insurance market happy with their doctors and their plans. If it does these things in an approximate combination that people can perceive with their own eyes, it will match up with the promises President Obama made to us, and will in time become not a monopartisan law slammed down our throats, but a monument to the success of the progressive project.

Within each of these areas, however, Americans believe Obama’s signature domestic policy is falling far short of what he promised the nation. That’s evidenced in the most recent polling: 44 percent of Americans say Obamacare will make things worse for their family, while just 23 percent say it will make things better; 47 percent of Americans say Obamacare will make health and premium costs more expensive, while only 15 percent say it will make such costs less expensive. And to this point, it’s employers who have had the strongest reaction, seeing the coming ramifications of the employer mandate.

The Weekly Standard reports: “A Gallup poll taken in June found that nearly one in five small businesses — 19 percent of those surveyed — have cut workers ‘as a specific result of the Affordable Care Act.’ The same poll, first reported by CNBC, found that 41 percent of those interviewed had suspended hiring because of Obamacare. The poll of 603 business owners with less than $20 million in annual sales also found that 55 percent believe Obamacare will lead to higher health care costs, while just 5 percent saw future cost savings.”

In this context, the incredible decision to delay the employer mandate portion of the law until after the last election Obama will face as president makes total sense. Ezra Klein is suggesting that repealing the employer mandate entirely is the way to go. Klein’s certainly right — but then, this has to be considered an admission that the employer mandate was about gaming the Congressional Budget Office rather than pursuing a policy that made sense for the economy: it served its purpose of getting the law passed, and now has outlived its usefulness.

As a matter of policy, conservatives should be happy with this move for more than just the schadenfreude. If there’s one benefit to Obamacare’s impact, it’s to shift people away from employer-sponsored coverage, which has insulated them for years from the marketplace. A larger individual marketplace with larger exposure to high premiums will create pressure for post-2016 reforms those on the right should favor — and for all the disruption this creates, it is the likeliest result of this step.

Whatever the policy rationale, the political result of the move is obvious: this is a step which will slow the Obamacare train wreck for craven and obvious electoral purposes. Despite three years and hundreds of millions of dollars spent in the ramp up to enforcement and implementation of the law, it’s obvious to anyone with a connection to businesses — particularly restaurant chains — with more than 50 full-time equivalent employees that massive uncertainty exists about the penalties they will face under the law — and whether those penalties could actually turn out to be less expensive than offering insurance coverage. This uncertainty was exacerbated a few weeks ago by the decision to delay the small business exchange for a year, eliminating the functionality of that marketplace overnight. Republicans have argued vociferously that Obamacare is impacting the job market negatively: this delay is a tacit admission that they are right.

Since its passage, Obamacare has served as an ever-evolving example of cronyist public policy in the era of unrestrained bureaucracy and a dominant K Street. The approach is straightforward: you pass a law which creates burdens on everyone under the guise of solving a problem, and then you pick and choose who actually has to abide by the law in practice. Policymaking becomes the business of traded favors with lobbyists and stakeholders, and whoever can extract favors and waivers the best. It doesn’t matter that the law put the date of implementation in stark terms.

Kathleen Sebelius’s HHS has used the wide latitude granted them under the law to hand out favorable treatment, twist the arms of the unwilling, and come down like a ton of bricks on their political enemies. The employer mandate delay is the most public example of this — a reminder that employers have better lobbyists than individuals, and that no matter what Congress says, we live in an era of rule by the regulators who always know what’s best.

Benjamin Domenech is a research fellow at The Heartland Institute (http://heartland.org) and editor of The Transom (http://thetransom.org).