President Obama unequivocally promised that if one wanted to keep your insurance, you could. Currently, the press is widely reporting the cancellation of individual insurance policies because of Obama Care. In response, the administration claims that the cancelled policies are those that do not meet Obama Care’s minimum requirements, so those being forced to change insurance and pay more will really be better off (even if they are paying a lot more for their health insurance). Perhaps, but President Obama’s pledge in the first sentence of this blog is still incorrect. Besides, do we really want the government telling us how much of anything we need to be purchasing?
But the more important story is why President Obama’s pledge is also incorrect for the vast majority of employees covered by employer health plans. Over two years ago, this article predicted the near complete demise of existing employer-sponsored health plans because of a combination or two different reasons. Nothing has occurred to change this prediction.
My firm’s health plan is a good example. Because of the lack of inflation adjustments in the determination of what constitutes a Cadillac plan, it is just a matter of time before Fulcrum’s plan faces the tax penalties for being too generous. Initially, we thought that perhaps we might be able to “grandfather” our plan to avoid Obama Care, but HHS regulations make it nearly impossible to have a grandfathered plan. Consequently, because of additional taxes/penalties, our employees will eventually not be able to keep our existing plan, in contravention to President Obama’s promise quoted at the beginning of this blog post.
Fulcrum is not a shoddy employer that requires the federal government’s oversight to treat its employees well. For the last four years, we have been in the top finishers in the “Best Places to Work” competition that covers the greater Los Angeles area, and which covers all industries and business types. In 2013 and 2010, we finished absolute first place in the small business category. We are proud of these awards, which show that our firm is not just doing what is minimally required. But because we are doing too much for our employees, the federal government will be effectively requiring us to give up our existing health plan. Unfortunately, my firm is typical of what will occur with the vast majority of health insurance plans.
Before the House Energy & Commerce committee, Secretary Sebelius stated that Obama Care “isn’t a government takeover of anything. These are private insurance plans.” But, Ms. Sebelius and President Obama fail to acknowledge publicly that the power to tax is the power to destroy. Through regulation and taxation, private insurance is being destroyed. The combination of regulation and taxes will require practically everyone to move to Obama Care, eliminating what is economically feasible using private options. That may be exactly what Obama Care needs to have the larger base of participants to support itself. Some might think this is a good idea, but no one can say that President Obama’s pledges are truthful, or are being honored.