The IRS has finally issued rules for the affordable implementation of ObamaCare. Sparking controversy is this:
WASHINGTON — In a long-awaited interpretation of the new health care law, the Obama administration said Monday that employers must offer health insurance to employees and their children, but will not be subject to any penalties if family coverage is unaffordable to workers.
The new rules, to be published in the Federal Register, create a strong incentive for employers to put money into insurance for their employees rather than dependents. It is unclear whether the spouse and children of an employee will be able to obtain federal subsidies to help them buy coverage — separate from the employee — through insurance exchanges being established in every state. The administration explicitly reserved judgment on that question, which could affect millions of people in families with low and moderate incomes.
Many employers provide family coverage to full-time employees, but many do not. Family coverage is much more expensive, and the employee’s share of the premium is typically much larger.
The gist is that employers are not obliged to weigh a worker's family status in deciding his total compensation, which makes sense - because the family insurance can cost an extra $10,000 per year, an employer would have a strong incentive to avoid family guys and gals when hiring for lower paying jobs.
Unfortunately, this means that a stay-at-home spouse becomes a tremendous financial burden due to lost federal subsidies; the employed partner's income can make the couple ineligible for Medicaid but the federal subsidy for health insurance may not be available either. Better never to marry - its the worst that could happen from a financial planning perspective, despite plenty of social science suggesting it has other benefits.
Well, we see through this game - Team Obama will eventually announce an interpretation of the rules such that families are eligible for the federal subsidies even if the employed partner is being offered affordable individual insurance. Delaying the announcement of that "unexpected" expense as long as possible is just part of the current budget imbroglio.
Remember - we had to pass the bill to see what was in it.
NO TIME LIKE THE FUTURE FOR BAD NEWS:
From Via Meadia:
So: will the new law bust government budgets, crush business under unaffordable costs or make health insurance prohibitively expensive for millions of working families? The wording of the law seems unclear on this point, and the Obama administration doesn’t want to give an answer. The new regulations seem to suggest that the administration realizes that business can’t pay these costs; at a time of fiscal cliff negotiations and massive public anxiety about deficits it doesn’t want to point to the potential new costs its cherished health care law could impose on the government. It is therefore waiting until a more opportune moment to take on the question of how the American health insurance system is going to work.
We still don’t know what kind of a health care system Congress created back in 2010. We still don’t know whether it will work or how much it will cost — and who will pay how much of the bill. The Affordable Care Act is not a solution to America’s health care problems.
ObamaCare - one more headwind for the US economy, which already has to contend with the frequent Washington cliff dives.