It’s been a few months since the launch of the health care exchange, one of the biggest remaining pieces of Obamacare. It’s been rocky, but the numbers are not too far off from projections. As the exchanges and the other pieces of the law become status quo, however, that has not stopped the doom and gloom stories. Obamacare will cut two million jobs (or maybe not)! Obamacare is the cause of AOL’s decision to cut 401(k) benefits for its workers! As much as people try to blame Obamacare for the latest business decision or news story, it’s true that the law has started changing our economy. However, these changes are for the better.
A lot of the complaints around Obamcare stem from the fact that it severs the link between insurance and full-time employment, as if that was an unintended consequence of the law. But far from an unintended consequence, it’s the foundation of what it set out to do, and the fact that we are seeing some changes means that it is working correctly.
Take the claim about lost jobs, for example. The headline makes it sound like businesses will have to cut jobs for some unknown reason, when the real story is about people simply choosing to work less. There are a lot of people who work full-time in jobs they don’t particularly care for simply to be eligible for health insurance. If people choose to work less because they don’t need to get insurance through their job, is that really a bad thing? Or does it allow people to make an unbiased choice about whether they value their time or money more, independent of health status? This same flexibility is also why Obamacare will lead to more entrepreneurship.
Or take the AOL story. It never made much sense to link Obamacare to retirement account matches, and throwing in the stories of “distressed babies” just made it even more cruel. But there is a real issue at the bottom of this story. Not for AOL, which can certainly afford to pay for insurance for its employees and still pay millions to its CEO. For a small business, though, with only a dozen or two employees, such an expense likely would cause the employer to drop insurance coverage for everybody because of the cost of spreading hundreds of thousands of dollars over a small risk pool. It’s a real issue for small businesses, and that’s what the exchanges help fix.
On a personal level, “job lock” is real. I simply can’t go without comprehensive insurance that covers pre-existing conditions. That severely limited my job choices, and made it all but impossible for myself (and people in my situation) to do things like be an entrepreneur. Obamacare doesn’t completely sever the link between insurance and job status, but it’s a step in the right direction, hopefully the first of many.
“But if we sever the link between insurance and working, won’t that make everybody lazy?” is the question that so many opponents ask: here’s just one of the many I came across making essentially the same point. Basically, it seems that there are two groups of people out there: those who believe that as soon as people get a benefit like health insurance, unemployment insurance, food stamps, or name your program, they will go on the dole because humans are inherently lazy; and those who, well, don’t think that. I’m in the latter group: I think people work because they want to, they make decisions based on family and personal needs, not because they analyze the finer points of benefits, and that in the end everybody wants to feel useful. I don’t work to get health insurance, and I would still work even if my job did not come with that benefit. As I said before, those who only work to get insurance generally aren’t doing it because they want to, and it’s doubtful that’s good for anybody in the long run. To answer the article’s rhetorical question, as a society we certainly can afford to pay for people’s peace of mind when it comes to health insurance.
We are still a long way from the day when insurance is not linked to a person’s job. When we do arrive at that day, though, I feel that instead of lamenting it, people will wonder why we ever put up with our crazy employer-based health insurance system in the first place.