The High Costs of Obamacare

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Obamacare will reduce the earnings of its 300,000 members by up to $5 an hour by requiring them to buy health insurance, according to a report by Unite Here, a union which represents chiefly lower-wage workers in service industries. The union said it “threatens the middle class with higher premiums, loss of hours and a shift to part-time work and less comprehensive coverage.”

The report quoted Earl Baskerville, 50, a food service worker at the University of Hartford in Connecticut: “Obamacare would cost me $4,855.20 a year more, or a $2.33 an hour pay cut.” And Angela Portillo, a maid at the Mandalay Bay Resort in Las Vegas: “The Obamacare website says (my husband and I) would have to pay $8,057.04 a year more to keep the great insurance we have now. That’s a $3.87 per hour pay cut.”

Americans who says they’ve been hurt by Obamacare outnumber those who say they’ve benefited from it by more than 2 to 1, according to recent polls by both Rasmussen and Gallup.

The number of beneficiaries will plummet if the Supreme Court rules in June that Obamacare subsidies can be paid only to those who buy health insurance through state exchanges.

The Kaiser Family Foundation estimates that, through February, only about 15 percent of the 17.2 million people eligible for Obamacare had enrolled.

“The long-time underwriting rule calls for at least 70 percent of an eligible group to participate in order to get enough healthy people to pay for the sick who will always show up first for coverage,” wrote insurance industry consultant Robert Laszewski at The Health Care Blog.

Americans aged 18 to 34 account for just 27 percent of signups. To subsidize premiums for those older and sicker, at least 39 percent in the risk pool must be “young invincibles,” the Department of Health and Human Services has calculated.

Young people also are more likely to put off paying their first month’s premium — a prerequisite for actually having insurance — so things are worse than the HHS numbers indicate.

If a disproportionate number of Obamacare signups come from the 4.2 percent of 18-to-34-year-olds who describe their health as “fair” or “poor,” a huge problem will morph into catastrophe.

Administration officials hold out hope for a rush of signups before the March 31 deadline. I hold out hope my retirement will be financed by the arrival of a caravan of unicorns laden with baskets of gold dust.

My hope may be more realistic. The pace of enrollments has slowed sharply since December. About half the uninsured have browsed Obamacare websites, but just 10 percent signed up, according to a survey by McKinsey & Co. It costs too much, said most who browsed but didn’t buy.

“They are not buying it because the premium — even net of the subsidies — is too much for plans that have deductibles that are too high,” Mr. Laszewski said.

The administration plans to spend $965 billion on Obamacare subsidies. They’ll benefit insurance companies at the expense of the low-wage workers, according to the Unite Here report. Since Obamacare passed, it said, “The average stock price of the big for-profit health insurers doubled, their top executives were paid more than a half-billion dollars in cash and stock options.”

A Brooking Institution study indicated that families with incomes between $20,000 and $38,000 will suffer the largest proportionate income declines.

“Only in Washington could asking the bottom of the middle class to finance health care for the poorest families be seen as reducing inequality,” the Unite Here report said.

Those who think Obamacare is a bad deal, or who can’t afford it, aren’t likely to change their minds before the end of the month. President Barack Obama gave them a good reason not to when he (illegally) delayed, again, enforcement of the provision canceling “substandard” policies.

This may save the scalps of a few endangered Democrats, but it undermines the economic viability of his “signature legislative achievement.”

If the uninsured are not buying into Obamacare because they don’t like it or can’t afford it, the individual mandate won’t be enforced, predicted Bloomberg News economics writer Megan McArdle. “Otherwise, we would be ‘helping’ the uninsured by raising the cost of the insurance available to them, and then fining them hundreds or thousands of dollars for not buying it. I believe the technical term for this is ‘political suicide.’ ”

Jack Kelly is a columnist for the Pittsburgh Post-Gazette and The Blade of Toledo, Ohio.

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