Contrary to what former Speaker Nancy Pelosi said, the time to find out what was in the dubiously named Affordable Care Act (ACA) legislation was before they passed it, not after. Even before full implementation next year, most Americans have recognized the threats posed by the massive, arguably worse legislation ever passed by any legislative body. Now we’re seeing the worst of those threats materialize.
Some of the most vociferous denunciation of Obamacare is coming from those who were so ardently supporting its passage, and the party that was forcing it upon the nation. Last week representatives of three of the nation’s largest unions sent a warning letter to Senate Majority Leader Harry Reid and House Minority Leader Nancy Pelosi. They accurately identified some of the unintended negative consequences of their onerous legislation, declaring that the health care law would “shatter not only our hard-earned health benefits, but destroy the foundation of the 40 hour work week that is the backbone of the American middle class.”
James Hoffa, president of the International Brotherhood of Teamsters, Joseph Hansen, the international president of the United Food and Commercial Workers International Union, and Donald Taylor, president of UNITE-HERE which represents hotel, food service, textile, gaming, and airport workers, signed the letter.
They began their diatribe, “When you and the President sought our support for the Affordable Care Act, you pledged that if we liked the health plans we have now, we could keep them. Sadly, that promise is under threat…We have been strong supporters of the notion that all Americans should have access to quality, affordable health care. We have also been strong supporters of you. In campaign after campaign we have put boots on the ground, gone door-to-door to get out the vote, run phone banks and raised money to secure this vision. Now this vision has come back to haunt us.”
They continued, “The unintended consequences of the ACA are severe. Perverse incentives are causing nightmare scenarios. First, the law creates an incentive for employers to keep employees’ work hours below 30 hours a week. Numerous employers have begun to cut workers’ hours to avoid this obligation, and many of them are doing so openly. The impact is two-fold: fewer hours means less pay while also losing our current health benefits.”
These observations have been validated by what’s happening with employers across the country. In April, the Society for Human Resource Management conducted a survey of small business owners. According to their study, 41% of 603 small business owners have put a hold on hiring because of Obamacare. Over 20% had already cut hours for their employees and reduced payroll.
So far this year dozens of private sector employers have announced reductions in hours for employees because of the demands of the health care law. Walmart’s reaction has drawn perhaps the most attention since they are the largest private sector employer in the country. Reuters revealed that nearly all of the retail giant’s new hires are part time employees. Nearly 10% of their employees are now part-timers, versus their previous 1-2% average. And they’re not alone, as over 200 public sector employers have had to make similar adjustments to avoid the penalties of not providing health care insurance for employees who work 32 hours or more.
Towers Watson, a human relations consulting firm, surveyed nearly 500 companies earlier this year regarding their health care plans. Over 40% of them indicated they are significantly altering their health insurance plans as a result of the ACA. They also found that 60% of the companies surveyed will look to the new health insurance exchanges as a means of reducing insurance and administrative costs. They’ll simply drop their company sponsored health insurance plans and send their employees to the exchanges to buy their own. Many indicated they will provide at least some pecuniary assistance in the transition.
The union leaders concluded their letter by declaring, “on behalf of the millions of working men and women we represent and the families they support, we can no longer stand silent in the face of elements of the Affordable Care Act that will destroy the very health and wellbeing of our members along with millions of other hardworking Americans.”
Not only is the oxymoronically named Affordable Care Act wreaking havoc within the health care and insurance industries, but it’s creating havoc with jobs, and the livelihoods of the very middle class that the ruling class in Washington claims to be so supportive of. Frankly, the union representatives are exactly right. The ACA is in the process of destroying our healthcare system as well as the 40 hour work week and full-time employee status of middle class workers.
The ACA never was the prescription for the ailments its sponsors claimed it was. It should be defunded, repealed and replaced before our health care system is irreparably broken, and the middle class downsized to part-time status. Sen. Max Baucus was right, it is a “huge train wreck coming down.”
AP award winning columnist Richard Larsen is President of Larsen Financial, a brokerage and financial planning firm in Pocatello, Idaho and is a graduate of Idaho State University with degrees in Political Science and History and coursework completed toward a Master’s in Public Administration. He can be reached at [email protected].