The Employer Mandate is Postponed: What Does This Mean For Obamacare? Is Ezra Klein Right–Should the Employer Mandate Be Repealed?

The administration has announced that employers with more than 50 employees will not be required to offer insurance to their employees until 2015.

Originally, reform legislation said that these employers would have to offer affordable, comprehensive insurance next year—or face penalties of $2,000 to $3,000 per worker

                              Proof that Obamacare is Not Working?

Without missing a beat, Republicans have stepped forward to say that the delay is evidence that Obamacare is faililng.

What they apparently doesn’t know (or doesn’t want you to realize) is that a delay in  the employer mandate will affect only a fraction of employers, and very few employees

First, the majority of large companies already offer health insurance that includes the benefits that the Affordable Care Act labels “essential.” (The only exceptions tend to be large restaurant and retail chains)

The mandate will have the biggest impact on small companies that today, may offer insurance, but often don’t provide “comprehensive” coverage. The postponement means that these firms will have another year to think about whether they want to expand coverage—or pay a penalty,

But their employees will not be hurt by the delay.  If either a restaurant chain or a small firm doesn’t offer benefits next year, both full-time and part-time workers be able to buy their own coverage in the Individual Exchanges where the majority will be eligible for generous tax credits. The coverage available the Exchanges will be just as good as the insurance their employers will be required to offer in 2015.

As former White House health policy adviser Zeke Emanuel pointed out today on MSNBC’s “Morning Joe”:  “The delay of implementation of the employer mandate will impact a limited number of companies. I actually don’t think this is that big a deal,” .

Emanuel went on to point out that the “the provision only applies to employers who have 50 or more employees. He estimated that there are ibkt  200,000 total employers in the U.S. [who would be] impacted and that “94 percent already offer health insurance” to employees.

Emanuel’s estimate may be high: “You’ve got 5.7 million firms in the U.S.,” says Wharton’s Mark Duggan, who served as the top health economist at White House’s Council of Economic Advisers from 2009 to 2010. “Only 210,000 have more than 50 employees. So 96 percent of firms aren’t affected.

“Then if you look among those firms with 50 or more employees, something on the order of 95 percent offer health insurance. So it’s basically 10,000 or so employers who have more than 50 employees and don’t offer coverage. Those companies probably employ around one percent of American workers.”

 To Judge the Success of Obamacare , Don’t Over-React to Day by  Day Headlines

Emanuel  also urged taking a long-term view of what the Affordable Care Act is going to accomplish, saying: “We need to look for 2020 rather than moment to moment for changes in the system.”

I couldn’t agree more. Reforming U.S. healthcare is an enormous undertaking. As I have said in the past, it will be a process, not an event. Along the way, there will be glitches. Each time, reform’s opponents will jump up and down, insisting that the End is Nigh. Obamacare is dead.  We must  ignore them—take the long view, and forge ahead.

I am hopeful that by 2020  reform’s goals will be realized. Even then, we will continue to modify and improve reform legislation over a period of years, just as we have revised Medicare.

The notion that we must “rush” to implement every aspect the ACA is misguided. When attempting to enforce the employer mandate, an emphasis on “speed” could lead to the “train wreck” that Republicans predict. 

What is crucial is that the “Patient Proteciton and Affordable Care Act” protects as many  Americans as possible, as soon as possible, while making medical care affordable by giving those who must buy their own insurance the subsidies they need. In 2014, this will be happening.

In the meantime, we already have begun to rein in health care costs, slowing healthcare inflation from 7% or 8% a year to roughly 3%. This is only a start, but a very good start.                               

                         How Will the Delay Effect the Mid-Term Election?

Predictably, some conservatives are crowing that the delay represents a “huge set back” for Obamacare. “The Obama administration has undermined its sole claim to greatness and delivered a blow to Democrats on the ballot in 2014,” writes Washington Post conservative columnist Jennifer Rubin. /

 In truth, this is far from a major setback for reform. Apparently Rubin doesn’t realize how few employers will be affected, and perhaps she doesn’t understand that without the employer mandate, even if these employers don’t offer benfits, the majority of their workers will be eligible for tax credits in the Indivudal Exchanges,

As for the effect on candidates running in 2014, even Fox News recogizes that Republicans, not Democrats are most likely to be hurt. 

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Join the debate on “Reining in Medicare Costs without Hurting Seniors”

The January 26 post below (“How to Rein in Medicare costs without Hurting Seniors“) has drawn some 43 comments (including mine, as I responded to readers). I thought of turning a couple of my replies into posts, but then decided it might be more interesting for you to read them in the context of what other readers said.

I would love to see more readers participate in this thread. Comments are still open.

It’s a lively thread that takes on a number of third-rail issues: Does Medicare spend too much on pricey cancer drugs, end-of-life care and brand name hospitals?

 Should we try to spend less on end-of life care? Many say “Yes,” but Zeke Emanuel (a medical ethicist and oncologist who was part of the Obama team during the president’s first term), says “No.” I link to a column where he notes that “It is conventional wisdom that end-of-life care is an increasingly huge proportion of health care spending. . . Wrong. Here are the real numbers: end-of-life care (not just for the elderly, but for all Americans) accounts for just 10% to 12% of  total health care spending. This figure has not changed significantly in decades.”

He goes on to suggest that while we probably can’t make end-of-life “cheaper,” we can make it “better . . .  Here are four things the health care system should do to try to improve care for the dying, even if they won’t save money.”

A number of readers comment on what is driving Medicare spending. Is it “patient expectations,”  “doctors’ fear of litigation,”  “regulations that dictate nurse-staffing ratios,” “practice patterns that doctors learned long ago,” or is the biggest problem “promotional efforts by manufacturers?”

Other questions come up: Does anyone really have any idea how much Medicare will cost in 2022?  By then will Medicare have begun negotiating with drug-makers and device-makers for discounts on drugs (the way the VA does now, saving 40%)?  How far will Medicare go in using medical evidence to decide what to cover?

One doctor/reader points out that in his field Medicare has begun to refuse to pay for procedures when research shows that they are not effective. He and another reader agree that in this way Medicare can provide “political cover” for private sector insurers who will follow Medicare’s lead.

We also discuss the deficit, and whether we should be trying to address the deficit now — or wait until the recession ends and unemployment falls. Also, is the deficit already dissolving as CAP suggests? 

And is the deficit our biggest problem? On this question, you will find links to Paul Krugman, Peter Orszag (who analyzes the slow-down in health care spending over the past three years as a “structural change, not just the result of the recession) and Ezra Klein,

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