Obamacare: In 2014 Will Workers Be Able to Afford the Health Benefits Their Employers Offer?

Recently AP floated a story that spread like a virus. Within a day it was picked up by Yahoo! the Wall Street Cheat Sheet, and the Washington Post  where it was headlined “Affordability Glitch.”

Thanks to a “wrinkle” in the law, the story warns, Obamacare may hurt many of the people it is supposed to help, by making “health insurance unaffordable for . . . workers employed by restaurants, retail stores, hotels, and small businesses.”  The law is explicit, AP explains: “companies that employ 50 or more workers must offer ‘affordable’ coverage to those working more than 30 hours per week — or face fines. ‘Affordable’ health insurance, as defined by the legislation, means that premiums can cost no more than 9.5 percent of an employee’s income. . . .    . . . For low-wage workers, many of whom live paycheck to paycheck and earn barely enough to cover basic necessities 9.5% represents a lot of money.”  

True, but the fact that the law says premiums can equal 9.5% of income doesn’t means that employer-sponsored insurance will cost 9.5% of a worker’s pay.

Nevertheless, Yahoo! conjures up a hypothetical employee who will be left out in the cold: “Take, for example, a restaurant worker who makes $21,000 per year. A premium that costs 9.5 percent of this income would run $1,995 for the whole year, or $166.25 per month.  How could this employee possibly shell out nearly $2,000 a year for insurance?”  

He will have to turn down his employer’s offer, and then the government will demand that he pay a penalty because he didn’t buy insurance!
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Health Wonk Review –Waste, Warnings and the Future

 

Last week I hosted Health Wonk Review for HIO.  This round-up of some of the health care posts published over the past two weeks includes:

–  A piece by Managed Care Matter’s Joe Paduda that takes a hard look at “Flu season and Tamiflu,” and asks “Which one’s more hyped?”

 – A investigative post on Health Care Renewal that reviews “The Tragic Case of Aaron Swartz,”  the young computer activist who faced criminal charges for downloading thousands of scientific scholarly articles from the site JSTOR. After being pursued by a “tough as nails, relentless federal prosecutor,” Swartz committed suicide. Yet blogger Roy Poses notes, this same U.S. Attorney has been “soft as a marshmallow when dealing with top executives of health care corporations.”

– A post by The Hospitalist Leader’s Brad Flansbaum questioning the ACA’s assumption that a high rate of hospital readmissions signals waste. Just how many were preventable?

 –  In  a provocative post on Health Business Blog, David E. Williams asks why Cincinnati hospitals are furious because some employers have signed up for an insurance plan that would pay all hospitals just 40% more than Medicare pays for the same service.  The Hospitals claim  that isn’t enough. Moreover, each hospital would like to set its own prices—quietly. (This allows brand-name hospitals to charge far more than some of their competitors, for exactly the same services. )

 – On Wright on Health, Brad Wright describes a new rule, proposed by the Department of Health and Human Services that could prove “disastrous” for patients on Medicaid: “HHS is now attempting to woo states into participating in the Medicaid expansion by allowing them to increase cost-sharing in Medicaid” for all but the poorest of the poor. (More bloggers and reporters might want to write about this. The proposed rule will be open for comment until Feb. 13.)

 

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