THE Obama administration abruptly announced that businesses won't face Obamacare tax penalties for another year if they fail to provide employee insurance, but the individual penalty will still go into effect. This means Democrats — who typically vilify “Big Business” — are now protecting companies from the tax man while arguing that those same businesses' workers should be treated more harshly.
The employer mandate was already causing businesses to cut workers' hours, fire employees and/or restrain growth to avoid Obamacare penalties. Delay of the employer mandate is not terrible news, although the associated uncertainty won't aid business growth. But if the employer penalty is bad policy, which even President Barack Obama is tacitly admitting with this delay, then why is it good policy to penalize workers?
It's not, of course. But little about Obamacare is either realistic or reasonable.
Take Obamacare's Medicaid expansion, which offers states larger federal matching funds for adding patients than what is provided for those already in the program. In a column, U.S. Sen. Tom Coburn and Louisiana Gov. Bobby Jindal noted the real-world impact of the Medicaid provision: “Is it fair that under an expanded Medicaid program, the federal government would pay a greater portion of the Medicaid dollar for an adult with no children above poverty, than for a single mother with children who live in poverty?” If the government is going to use taxpayer dollars to subsidize health care, shouldn't it focus most on the truly needy?
Or consider the law's many new insurance mandates. The Wall Street Journal recently noted healthy citizens could see their insurance rates double or even triple on the individual market. These are the same people most likely to be hit by the individual penalty. They will soon have the choice of paying far higher insurance costs for coverage they seldom need, or paying a fine.
The young and healthy will see higher prices because of Obamacare-mandated cost-shifting from those with serious health problems. Of course, all insurance is designed to spread costs among many, but people expected to have high health care utilization typically pay more than those with lesser need — just as those with multiple accidents pay higher auto insurance rates than drivers with spotless records. Obamacare flips this practice on its head. It's like fining families who rarely drive toll roads to cut rates for overloaded trucks flying down the highway.
In Virginia, the Journal found a healthy 40-year-old nonsmoker can currently get insurance for $63 per month, but will pay at least $193 under Obamacare. Federal subsidies will cover the cost for some. But a Virginian earning more than $33,150 won't get subsidies. He'll have to pay higher insurance prices (or face a fine) and also pay taxes to cover the cost of other citizens' now higher-priced, subsidized coverage.
Under Obamacare, workers face financial penalties even as similar fines are declared too punitive for businesses, the health needs of those living in poverty are made a lower priority than those with higher incomes, and health-conscious citizens may be financially penalized so a perpetually drunk neighbor can obtain lower insurance rates.
Obamacare has always been unworkable. But now its effects are increasingly arbitrary as well.