Exemptions from ‘Reform’?

Certain companies have been exempted from part of the new health-care ‘reform’ law that requires minimum benefit levels for insurance policies. It seems that, maybe at some point, even the Obama administration has to acknowledge the reality of economics.

A recent Bloomberg news article reports the following:

Thirty companies and organizations, including Jack in the Box Inc., won’t be required to raise the minimum annual benefit included in low-cost health plans often used to cover part-time or low-wage employees. The Department of Health and Human Services, which provided a list of exemptions, said it granted waivers in late September so workers with such plans wouldn’t lose coverage from employers who might choose instead to drop their health insurance altogether. Without the waivers, companies would have had to provide a minimum of $750,000 in coverage next year, increasing to $1.25 million in 2012, $2 million in 2013, and unlimited coverage in 2014.

[picapp align=”left” wrap=”true” link=”term=sebelius&iid=9839083″ src=”http://view4.picapp.com/pictures.photo/image/9839083/sebelius-democratic/sebelius-democratic.jpg?size=500&imageId=9839083″ width=”234″ height=”158″ /]This was just one of the many mandates imposed under the new law — many of which predictably have and will lead to unintended consequences. The most obvious consequence is that many employers are now faced with not being able to afford providing coverage to their employees due to the cost of these well-intentioned (at least, we think) yet misguided attempts at ‘reform.’

What’s particularly disturbing is that this Bloomberg article started off by stating the following:

Almost a million workers won’t get a consumer protection in U.S. health law meant to cap insurance costs because the government exempted their employers.

Of course, that statement flies in the face of the reality of the situation. First, how can a company being forced with dropping its employees’ insurance coverage be considered “a consumer protection”? Obama’s Department of Health and Human Services may have ulterior political motives in granting these exemptions, but the fact remains that consumers will be aided by the fact that they will not lose the insurance coverage they now have through their employer. And second, such caps don’t really cap insurance costs, they just attempt to limit how much that insurance directly costs policy holders. When benefits are unlimited (as will apparently be the case under the law starting in 2014 according to the report, assuming no more arbitrary exemptions), the cost of coverage goes up, and that cost will be shifted to someone.

It’s just a shame companies now have to come crying to the government to be granted waivers from the law. This is a bureaucratic power that could prove to be rife with the potential for corruption and political manipulation.

A political cynic would argue that maybe all of this is just another way for government to grow its power. But no one likes a cynic, so we’ll just keep believing everything is just fine.

* The preceding was also posted on the Young Americans for Liberty blog.

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