Will ObamaCare Collapse?

Large employers who spend $80 billion a year to insure millions of employees and their families say ObamaCare is headed for “collapse.” Human resource executives see the law as pushing employers to drop health coverage. A 28-page analysis by the Association of Chief Human Resource Officers (ACHRO) finds a majority believe the law must be repealed or overhauled.

ObamaCare requires employers to offer health insurance to their employees. If they don’t, they would have to pay a penalty beginning in 2014. But when McDonald’s and some other employers warned it would be too expensive to ensure their large ranks of employees, the Secretary of Health and Human Services  (HHS) issued waivers, taking dozens of companies off the hook, The New York Times and other publications reported. Preferential treatment for some companies is sure to cause resentment.

The ACHRO report said its members believe “with each passing year” ObamaCare “will encourage more employers to drop employer provided care and prompt their employees to seek coverage through exchanges” to be set up in every state to sell insurance. The exchanges supposedly would allow individuals to shop to see if they are eligible for government subsidies to help pay for the health care. But Republicans may block the establishment of exchanges, according to a Nov. 10 story in Vital Signs.

When ObamaCare was being carelessly knitted together in Congress last spring, the Congressional Budget Office (CBO) projected that about 3 million people, a relatively small slice, would lose their employer-sponsored health plans as a result of the legislation.  It now is clear that was a gross underestimation. Employers may well “find it more profitable to eliminate health benefits altogether,” said an Oct. 29 WSWS.org story.

Large employers “want their employees and retirees to have access to affordable, high-quality health care. However, on the whole, large employers believe PPACA (the initials for what is falsely named the Patient Protection and Affordable Care Act) broadens access while failing to make any meaningful change in the way health care is delivered,” OCHRO declared.

Many employers see “the system created by the law eventually collapsing, an event which will force Congress to draft the next version of health care reform.” As the human resources executive’s association notes, “The vast majority of Americans receive health insurance through the employer-based system,” a system that has worked well until the bureaucrats muddied the water.

Paul Keckley, executive director  of the Deloitte Center for Health Solutions, was quoted as saying, “I don’t think you are going to hear anybody publicly say, ‘We’ve made a decision to drop insurance.’ What we are hearing at our meetings is, ‘We don’t want to be the first one to drop benefits, but we would be the fast second.’ We are hearing that a lot.”

Republicans in Congress are leaning on at-risk or moderate Democrats to help them strip out “the bad parts of ObamaCare,” according to a Nov. 12 story in Newser.

The analysis by the human resource executives uncovered almost unbelievable regulatory duplication, confusion, and infinitely needless paperwork sufficient to drive those forced to comply to tear out their hair in frustration. Union favoritism and pickiness as to the number of pages and print font size required for documents provided to employees, unmasked the politics and nonsense embodied in the law’s rules.

The law encourages employers “who offer very generous benefits to discontinue offering those benefits.” Businesses are concerned about the 40 percent excise tax on so-called Cadillac Plans for any health benefit in excess of $10,200 for individuals and $27,500 for family coverage—except for union plans. The $10,200 threshold does not exist for unions and the 40 percent excise tax is triggered only if coverge exceeds $27,500. “There is simply no legitimate policy reason for the distinction,” according to the association’s analysis. (Other than the fact that union money backs the Obama people).

Not only Health and Human Service is replete with regulatory mandates, but apparently much of the federal government is getting into the act. The Labor and Treasury Departments have issued guidance with “very specific requirements that would “create significant administrative burdens…costly and difficult to implement” making it harder for “employers to offer efficient, effective, and affordable health care coverage to employees, their dependents, and retirees.”

ObamaCare also “requires all health plans to phase out annual dollar limits on essential benefits by 2014 and on lifetime dollar limits on essential benefits that may have taken effect by September 23, 2010. But the Feds have not defined “essential benefits.” Careless confusion reigns.

Employers must extend dependent coverage to children up to age 26 (a benefit much-touted by the Democrats). But it is little known that this mandate applies even if the adult child has “access to other employer-based coverage,” the analysis pointed out.

The highly praised wellness programs in the law are pleasing to the Association. But its analysis points out that final regulations prohibit employers from offering any benefit to individuals for participating in wellness programs that ask about family medical history—“something that is a critical element of any wellness program. So, regulations are “hampering employer efforts to use and expand these programs.”

The law creates utter confusion as to who is a full-time employee and a part-time employee. Employers are “very concerned” that regulations being considered by the IRS and Labor Department “may inappropriately categorize many part-time employees as full-time workers.” This would mean having to cover them with insurance even if they only worked, say, 10 hours a week most of the year, but long hours during a holiday. And maybe even their dependents and retirees.

Just to satisfy their insatiable hunger for more rules, the health law also “requires employers providing ‘minimum essential coverage’ to any individual to file IRS returns certifying the name and identification of covered individuals, dates of coverage during the calendar year, whether the coverage is through a qualified plan offered through an exchange, the amount of any advance cost-sharing or premium tax credit received by the individual, the identity of the employer maintaining the plan, and the portion of the premium paid by the employer.”

The reporting employer must then send a written statement to each individual who was included on the return, providing each individual with the information which was reported to the IRS. Much of the same information must also be reported to the relevant exchange by the offering employers.

The analysis sums it up best: “With each new administrative burden, each new direct and indirect tax, each new mandate, and with each piece of added complexity, employers are nudged in the direction of dropping coverage altogether.” No wonder collapse is inevitable.

  • http://ow.ly/3akSX ricardoeddy

    You guys should stop complaining because, one the health care we have now isnt as good as it was supposed to be. also the law has just been signed so give it some time. so if u want to say u have the right to choose tell that to ur congress men or state official. If you do not have insurance and need one You can find full medical coverage at the lowest price check http://ow.ly/3akSX .If you have health insurance and do not care about cost just be happy about it and trust me you are not going to loose anything!

  • Chezwick_Mac

    Will Obamacare collapse? We can hope and pray.

    • http://blog.yintercept.com yintercept

      Unfortunately, the real danger of Obamacare isn't the exchanges, but the underlying radical structure. If ObamaCare collapses, an even worse and more oppressive system would take its place.

      The only way to restore a free market in medical care would be for patriots to actively design a system that restores the free market. with something like http://www.medicalsavingsandloan.com

      • kwg1

        They want it to fail so they can point to "Government One Payer" as the solution. This entire bill now law was never expected to cure anything! In fact it is my belief and observation they all knew full well it would collapse the system! i believe that because of the fact of who now is saying it is to costly, SEIU. With them saying that and the only entities raising premiums being the insurance companies, my observation is not a stretch by any means. Look out now boys it's full speed ahead and damn the torpedos!

    • Wesley69

      It's going to fail. Just look at Europe! Stubborn leftist politicans. The Jackass is the right symbol for the Democrats.

  • logdon

    The very name reeks of the narcissistic, self regarding hubris which resulted in the crushing defeats during the mid term elections.

    Will Americans wish to be reminded of this anti American clown after his disastrous tenure is gone and buried?

    Somehow I doubt it.

    • http://www.okcteaparty.org Dan

      Recall that Peggy Noonan, while observing President Obama's November 3rd remarks about the election results, said she thought to herself, "He's not even going to be a good Ex-President" and described his remarks as "Inert Gas" (i.e. Obama as Gas Bag?).

      • http://blog.yintercept.com yintercept

        Obama Care is primarily about laying structure (that is placing progressives in gate keeper positions). This is the way progresives captured education. Van Jones called this process of building structure "organizing within the government."

        If Obama becomes an ex-president, he will use his celebrity power and the gatekeeper positions to further the capture of health care.

        Obamacare was designed to fail, but to fail in a way that would leave his cronies in charge.

  • redheart

    It's going to collapse into the "Public Option" and we will all have rationed care. This was the plan all along.

    • American_Flag

      All lies. Lies at every step of the way. Welcome to the year 2010 – in the USSA. United Socialist States of America. Travesty.

      • Wesley69

        Death panels as Sarah Palin called them would become a reality. This is what you get when you rush legislation through without thought and then try to take care of your interest groups.

  • ajnn

    Breaking the relationship between 'employment & health insurance' would be a benefit to the american economy. employment based health insurance has an impact on exports similar to a 10% (or more) tax on american made goods and services.

    separating employment and health insurance could function as a repeal of an enormous anti-job tax.

    Of couse, the process includes enormous dislocation and gaps in benefits to working people that will take years to close. the human cost will be ugly. this is a big problem for me.

    the 'Left', again, shows that it thinks it can change reality by passing laws. we have a problem and obamacare may help us think in the right direction, but the human cost of this set of laws is ugly and denied by the Left. people are being hurt by bad legislation in the name of a 'progressive agenda' which has the same understanding of the world as thr 1930's Facist movement.

    • wdwrkr

      I agree that healthcare should not be tied to employment. However, breaking the link will not reduce the impact of healthcare coverage on exports. Simply because employers will have to pay directly to employees the $$'s that are currently spent on HC insurance. Otherwise it will be a big hit to employees. Contrary to progressives pronouncements, healthcare ain't free. Someone has to pay for it. And that someone is us. One way or another, we all pay for healthcare (even poor folks who think they're getting something FREE).

      I favor removing any tax preferences for purchasing HC insurance by anyone; individuals, or, employers. My employer-provided HC insurance should be taxed as income. That way, many people will voluntarily opt out of the employer/insurance boondoggle, take the additional income, and shop around for lower cost catastrophic insurance (which is what "insurance" should be). This way we'll gradually get the employers out of the insurance business and restore balance to the market.

      • marcustullius

        Employer-funded healthcare has always been nothing but a tax dodge. Somehow the general public has a twisted image that businesses are paying for employee healthcare. No, businesses are taking part of an employee’s earnings and directing them to buy health insurance to help the employee avoid paying income tax. What employers don’t understand is that the current tax code also allows employers to pay the employee for healthcare without buying insurance and still avoid the tax. Take a look at a group called Lyfebank to see how this is being done.

    • http://blog.yintercept.com yintercept

      The employer based insurance that we currently have was the creation of progressives.

      The United States has been following a well planned progression into socialism. It started with employer based insurance … which everyone knows is a horrible way to fund health care.

      Once people expect a third party to care for them, we would move to a government directed set of health place that would collapse and finally progress on to single payer. Single payer is prone to corruption and the final step of the progression is government provided care.

      Yes, progressives are correct in saying employer based insurance is a horrible way to fund health care.

      They neglect to mention that they were the ones who created this monstrosity.

      Obamacare was designed to fail with a radical structure in place that would herd the people on the progression to pure socialism.

      • Mr. X

        Most progresives do not know that it was their movement that designed employer based health care. The progessive movement consists of many "kinds." Basically pompous do gooders and revenge seekers. the well meaning progresive then joins the revenge seekers and represses when their plans are resisted or if they fail. the whole thing is a mental illness.

  • American_Flag

    Doctors will retire early, and there is no incentive to become a doctor in the future, especially if Doctors get paid from the Govt. playbook. I ask WHERE IS THE DEMOCRACY in this country? Do the dolts along the beltway know what freedom is? Do they know what The constution and the Bill of Rights are? Do they know what the Declaration if Independence says? Our forefathers were great great men. Unlike the blithering idiots of today who on a good day work 2-4 hours a week. Travesty. All of DC politicians should be flushed down the toilet. Pieces of rotten garbage, every last one, starting at the White House. A bunch of unknowing, inconsiderate, clueless mo****-effers.

  • BigPat7

    Perhaps Obama will collapse as a whole. And with him goes many others, Obamacare as well.

    U.S. Supreme Court confers on Obama eligibility http://www.wnd.com/index.php?fa=PAGE.view&pag

  • adamjw2

    Your first link to the ACHRO pdf is not working.

  • DanL

    Health care was added in the 1940s by most companies when they competed for good employees during WWII and the government controlled wages. A company could add healthcare benefits (untaxed) to raise real wages while not exceeding government wage controls. American workers then became accustomed to such packages and they became standard for large companies.
    Prior to this, people were expected to pay their own medical costs. The American economy would be better off if we went back to that structure, with private insurers making a variety of policies available, not the one-size-fits-all ObamaCare abortion. The American people need to be able to choose their insurance, their doctors, and their hospitals in a free market. Only those who cannot provide for themselves for a proven reason should be subsidized by the rest of us (through taxes, charities or whatever other structure we could come up with). This would free businesses from the regulatory burdens, the paperwork burdens and other costs associated with providing medical care for their employees.

  • rangerrebew

    The question is not so much will Obamacare collapse but will America collapse because of Ali Bama?

  • USMCSniper

    Under the American system you have a right to health care only if you can pay for it, i.e., if you can earn it by your own action and effort. But nobody has the right to the services of any professional individual or group simply because he wants them and/or desperately needs them. The very fact that he needs these services so desperately is the proof that he had better respect the freedom, the integrity, and the rights of the people who provide them. You have a right to work, not to rob others of the fruits of their work, not to turn others into sacrificial, rightless animals laboring to fulfill your needs.

  • Wesley69

    If the Supreme Court declares the provision that all Americans must buy health insurance whether they want it or not, ObamaCare will die due to a lack of funds.

    Save us from Obama and his radical policies, Supreme Court.

  • Bill

    Obama's comicare has already failed us. There is noway a system like this will work. There are so many people that currently have insurance but can't get the care they want. They would overwhelm the HC system and collapse it. Just imagine hundreds of millions of MRI appointments. People that currently don't have prescription plans getting prescriptions.
    I want every hard working person legal citizen to have the best health care possible. The problem is how to pay for it. I think that real competition and supply and demand will fix the problem. But I would accept some level of gov control. The insurance companies should not be allowed to cancel policies if your paying the bill. There should be medical welfare for pre existing conditions. Nobody should lose their home due to medical bills.
    How? That's the question.

  • MollyBrand

    'The recent changes in our health care laws are going to significantly increase costs to our Team Members going forward. We estimate that the changes in the laws for 2011 will increase our total plan costs about $9 million…to accommodate the cost of the new federal mandates, it is necessary to raise the deductibles for the medical plan to $2,000 and the prescription plan to $1,000 as well as increase the out-of-pocket maximum to $6,000. This is very important for everyone t understand: 100% of the increase in deductibles and out-of-pocket maximums in 2011 compared to 2010 are due to the new federal mandates and regulations."

    I cannot say the name of the major employer I work for but we received this at re-enrollment this month.

  • waterwillows

    They looney left has done a pretty good job of messing thing up world wide. In Europe we are seeing the collapse of the EU via the euro-dollar. It is not just Greece and Ireland affected. Now it looks like Portgual and probably Spain will go down with lefty ideals. Soon it will not just be Greece that can't pay back its debt, it will be that everyone can't pay back their debts.
    Obamacare is just another sneaky intrusion into the downward spiral of country that the looney left love so much. Of course, it will collapse. Like the EU, there is no other option.

  • http://www.hollywoodrepublican.net Frank DeMartini

    This is another example of all that is wrong with Obamacare. May it see a quick and painless death before we all do.

  • votedagainstoby


    This is what OBAMACARE is DESIGNED to do.

    Oh no,.. What,.. all the evil, bad companies dropped the insurance they used to provide because we made it too expensive!??

    Well then the government will step in and create the "SINGLE PAYER" system to "FIX" the problem government caused.



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    I believe that ObamaCare will never collapse.

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