Hardly a day goes by without more depressing news about the effects of the Affordable Care Act, on both the state and national levels. And what’s likely to come next has the potential to affect far more Nevadans than did the initial rollout back in October.
Thanks to a politically expedient delay by the Obama administration, the law’s employer coverage mandate doesn’t take effect until 2015. However, early plan renewals already are rolling in. As reported by the Review-Journal’s Jennifer Robison on Sunday, the numbers are astounding, with some businesses facing premium spikes ranging from 35 percent to a whopping 120 percent, according to local insurance brokers.
These businesses can’t afford to swallow the massive increases, so employees will bear the burden — especially young, healthy males.
That’s because Obamacare, by design, prohibits insurers from offering lower rates to healthier groups of people and caps the allowed premium gap between older and younger enrollees. “It’s like if there were no safe-driver discounts with State Farm,” insurance broker Frank Nolimal of Assurance Ltd. told Ms. Robison. “Everybody has the same rate, whether you have three DUIs or you’re a (nondrinking) churchgoing Mormon.” Or, sticking with the auto analogy, it’s like making the owner of a Hyundai Sonata pay the same insurance rate as the owner of Porsche 911 Cabriolet.
Of course, that assumes employees can keep their employer-based coverage. Mr. Nolimal said professional, white-collar companies such as law or engineering firms probably would renew plans at higher prices because they must compete for scarce skilled labor. But moderately skilled or low-skilled workers — say, those making $8 to $14 an hour with a landscape business — could lose coverage as companies drop plans that cost too much relative to salaries. For companies that keep their plans, employees can expect leaner paychecks. Mr. Nolimal told Ms. Robison that one of his clients is facing monthly per-employee premium increases of $160 to $340 beginning in June, and that the client intends to shift most of that cost onto his employees.
Employees who lose their plans will, by law, have to purchase overpriced plans from Nevada Health Link — the disastrous performance of the state’s exchange has been well-documented — or from a company that sells Obamacare-compliant policies, or pay the penalty tax for not doing so.
Las Vegas insurance broker William Wright told Ms. Robison the premium changes put as many as 90,000 policies statewide at risk of cancellation or nonrenewal this fall — more than three times the 25,000 enrollees who were affected in October, when Obamacare-compliant plans first rolled out.
All this amounts to a huge financial burden on businesses and employees, with Obamacare not only taking more money from employers and workers, but causing great harm to the economy. The Obama administration’s efforts to delay the most costly and painful parts of the Affordable Care Act will result in even harsher political consequences for Democrats, who approved the law without a single Republican vote. Mr. Nolimal noted that as many as 85 percent of small-group plans will renew in November and December, with the price hikes due to hit mailboxes in September and October — just before the midterm elections.
When employees see massive wage losses due to equally massive premium increases, or when they lose their insurance or perhaps even their job, they’ll certainly understand the importance of repealing the Obamacare monstrosity. November’s ballot will give them a chance to say as much.