How Obamacare “Works”

$12 billion ain't exactly chicken feed:

President Barack Obama's decision to delay implementation of part of his healthcare reform law will cost $12 billion and leave a million fewer Americans with employer-sponsored health insurance in 2014, congressional researchers said Tuesday.

The report by the non-partisan Congressional Budget Office is the first authoritative estimate of the human and fiscal cost from the administration's unexpected one-year delay announced July 2 of the employer mandate - a requirement for larger businesses to provide health coverage for their workers or pay a penalty.

The analysts said the delay will add to the cost of "Obamacare's" insurance-coverage provisions over the next 10 years. Penalties paid by employers would be lower and more individuals who otherwise might have had employer coverage will need federal insurance subsidies.

"Of those who would otherwise have obtained employment-based coverage, roughly half will be uninsured (in 2014)," CBO said in a July 30 letter to Representative Paul Ryan, Republican chairman of the House of Representatives Budget Committee.

Under Obama's healthcare reform law, employers with 50 or more full-time workers were supposed to provide healthcare coverage or incur penalties beginning January 1. But the requirement will now begin in 2015.

The delay intensified doubts about the administration's ability to implement Obama's signature domestic policy achievement and stirred Republican calls for a similar delay in another Obamacare mandate that requires most individuals to have health insurance in 2014.

Note that the decision to delay the implementation of Obamacare was made by an imperial presidency that isn't being called an imperial presidency by all of the people who were worried about the supposed imperial presidency of George W. Bush, because now that their guy is the imperial president in question, having an imperial presidency is presumably not a big deal anymore.

Oh, and there is also this:

Be careful you don't fall off the Obamacare "cliff" when the boss asks you to put in some overtime.

Working more could ultimately mean thousands of dollars less for you under a quirk in the new health-care law going into effect this fall. This could prompt some people to cut back on their hours to avoid losing money.

"Working more can actually leave you worse off," the price-comparison site ValuePenguin.com notes in a new analysis.

"It's sort of an absurd scenario," said Jonathan Wu, ValuePenguin.com's co-founder. "It's something for people to be aware of."

In that scenario, an individual or family whose annual income surpasses maximums set by the federal government—if only by $1—will totally lose subsidies available to buy health insurance under the Affordable Care Act.

The loss of those subsidies in some cases will mean that people potentially would have been better off financially if they had worked less during the year, Wu said. And they then would have to work significantly more to make up for the lost subsidy.

"I think they'd be surprised to see how drastic it is," said Wu. "I'd be kind of shocked to see if I make $100 less (in total income each year), I get all these benefits, but if I make $100 more, I get nothing."

"You basically don't want to fall in that hole," said Wu, adding that he believed contractors and others with more control over their incomes would be apt to adjust their hours worked to avoid the subsidy cliff.

Don't you love how much we are finding out about the health care "reform" bill, now that we have passed it?

In Some Blog Posts, I Don't Even Have to Offer Editorial Comments

Link:

In order to ensure Americans understand how to access the benefits available to them when many provisions of the Affordable Care Act go online October 1, the Obama administration announced last month that it is setting up a call center that will be accessible to Americans 24 hours a day. 

One branch of that call center will be located in California’s Contra Costa County, where, reportedly, 7,000 people applied for the 204 jobs. According to the Contra Costa Times, however, “about half the jobs are part-time, with no health benefits — a stinging disappointment to workers and local politicians who believed the positions would be full-time.” The county supervisor, Karen Mitchoff, called the hiring process “a comedy of errors” and said she “never dreamed [the jobs] would be part-time.”

Incentives and Disincentives Matter

I am shocked--shocked!--to find rational economic decisionmaking going on here:

The world’s largest retailer delivered an ultimatum to District lawmakers Tuesday, telling them less than 24 hours before a decisive vote that at least three planned Wal-Marts will not open in the city if a super-minimum-wage proposal becomes law.

A team of Wal-Mart officials and lobbyists, including a high-level executive from the mega-retailer’s Arkansas headquarters, walked the halls of the John A. Wilson Building on Tuesday afternoon, delivering the news to D.C. Council members.

The company’s hardball tactics come out of a well-worn playbook that involves successfully using Wal-Mart’s leverage in the form of jobs and low-priced goods to fend off legislation and regulation that could cut into its profits and set precedent in other potential markets. In the Wilson Building, elected officials have found their reliable liberal, pro-union political sentiments in conflict with their desire to bring amenities to underserved neighborhoods.

Mayor Vincent C. Gray (D) called Wal-Mart’s move “immensely discouraging,” indicating that he may consider vetoing the bill while pondering whether to seek reelection.

If you raise the price of a commodity--including labor--you are going to get less of that commodity. Who woulda thunk it?

The Latest Job Numbers Are Bad. Again.

Another story I am late to, but one worth highlighting:

The headline numbers for the May jobs report are about what you would expect for a New Normal economy stuck in 2% growth mode: 175,000 net new jobs last month, the unemployment rate ticking up to 7.6%. No broad signs of acceleration; just the opposite, in fact. As Barclays bank points out, the three-month average increase in nonfarm payrolls through May is now 155,000 vs. a first-quarter average of 207,000. (And at May’s pace of job creation, it would take another 58 months to get back to 5% unemployment.)

In addition, hours worked grew at a 1.9% annualized rate in April and May versus the 3.6% growth seen in the first three months of the year. This downshift reflects a slowing in GDP growth. The bank’s tracking estimate for real GDP growth in the second quarter stands at 1.2%, down from 2.4% in the first quarter.

And what kind of jobs are being created? As economist Dean Baker of the Center for Economic and Policy Research points out, job growth was again narrowly concentrated, with the restaurant sector (38,100 jobs), retail trade (27,700) and temporary employment (25,600) accounting for more than half of the job growth in May. Baker: “These are all low-paying sectors. It is worth noting that the job growth reported in these sectors is more an indication of the weakness of the labor market than the type of jobs being generated by the economy. The economy always creates bad jobs, but in a strong labor market workers don’t take them.”

Indeed, restaurant jobs make up just under a tenth of total US nonfarm jobs, but they accounted for more than a fifth of the jobs created last month.

Another sign of internal labor market weakness: the underemployment rate of 13.8% — which includes part-timers who would prefer full-time work — remains more than six percentage points above the “real’ unemployment rate. Before the Great Recession, that gap was typically less than four points. Indeed, 5.7% of US nonfarm workers are now “part-time for economic reasons” — either their hours were cut back or they can only find part-time gigs — vs. 3.2% precession.

It's all very depressing. Even more depressing: We are likely to see a lot more such reports before the economy starts to pick up some real momentum.