What Ruined Obama’s Credibility? Obamacare

By Michael Tanner

Monday, September 09, 2013

As we debate intervening in Syria, there is a great deal of talk about possible damage to President Obama’s credibility abroad. But at least at home, Obamacare has already left that credibility rather diminished.

Remember when President Obama told Americans that if they liked their current insurance, they could keep it? In fact, just a few weeks ago, he reassured us that “if you’re one of the nearly 85 percent of Americans who already have insurance … you don’t have to do a thing.”

Tell that to the 15,000 husbands and wives of UPS workers who are being kicked off their spouse’s policy. Blaming rising costs brought on by Obamacare, the company announced last month that it will no longer provide spousal coverage if the spouse has access to coverage through his or her own employer. So those spouses will still have access to insurance, but it won’t be the policy they have now, even if they liked it and even if it was more affordable. They are hardly the only ones. The University of Virginia also announced that it was dropping spousal coverage for those with access to other insurance. (And even after that measure, Obamacare will be adding $7.3 million to its health-care costs next year.)

If you want to know why people don’t trust the president on Syria, look at his promises at home.

According to the benefits consulting firm Towers Watson, 12 percent of employer plans will not include spousal coverage next year, three times as many as in 2013.

Other companies are also being forced to consider changing or cutting coverage. For example, Universal Studios recently announced that it was dropping coverage for some part-time workers. Similarly, Wegman’s Supermarkets has eliminated its health-insurance plan for part-time employees.

Meanwhile, in New Jersey at least 106,000 people currently insured under what are known as “basic and essential” health-care plans will likely lose their coverage because those inexpensive plans don’t meet Obamacare’s mandates. Those New Jerseyans will now have to purchase much more expensive insurance; even if subsidies offset some of the cost, they won’t be keeping their current plan.

Or do you recall when the president promised that Obamacare would make our insurance premiums go down, so much so that “for a lot of people, it will be cheaper than your cell-phone bill?” Last week, a study by the influential — and far from right-wing — National Journal concluded that “for the vast majority of Americans, premium prices will be higher in the individual exchange than what they’re currently paying.” In fact, even after accounting for the subsidies that many Americans will receive, the study found that most Americans will pay more in premiums for Obamacare plans than they do for their employee plans today.

Individual plans in states that already have Obamacare-like regulations that have distorted their markets, such as New York and New Jersey, won’t see huge increases, and may even see premiums fall somewhat. But in most states, rates will be considerably higher: In Georgia, premiums could rise as much as 198 percent for a 25-year-old and 100 percent for older individuals. In Indiana, they’ll be up as much as 72 percent; Florida, an average hike of 35 percent; South Carolina, as much as 20 percent in the small-group market and 70 percent for individuals.

And then there were all those times when the president assured us that Obamacare was good for business and would create more jobs and economic growth.

Instead, we’ve already seen evidence of employers’ shifting from full-time to part-time jobs in order to avoid the increased costs of Obamacare. For example, during the second quarter of this year, the number of Americans working 25 to 29 hours per week in their primary job rose by 119,000, or 2.7 percent. At the same time, the number of those working 30 to 34 hours fell by a monthly average of 146,500, a 1.4 percent decline. In fact, 88 percent of all jobs added during President Obama’s time in office have been part-time.

No less a source than NBC News recently ran a story claiming that “employers around the country, from fast-food franchises to colleges, have told [the network] that they will be cutting workers’ hours below 30 a week because they can’t afford to offer the health insurance mandated by the Affordable Care Act, also known as Obamacare.” This has caused Joseph Hansen, president of the 1.2-million-member United Food and Commercial Workers, to warn that Obamacare will “destroy the foundation of the 40-hour work week that is the backbone of the middle class.” When the president has lost the networks and the unions, you know there is something very wrong.

Even in Massachusetts, home of Romneycare, an independent study released late last month found that more than 60 percent of workers covered by small businesses will likely be facing rate hikes, some by as much as 97 percent. As a result, many Massachusetts companies are reportedly considering dropping their current coverage, turning more full-time jobs into part-time ones, and possibly laying off workers, too.

The same is being seen throughout the country, where survey after survey shows small-business employees facing the prospect of lower wages, fewer benefits, reduced hours, or lost jobs. The fast-food and restaurant industry has been especially hard hit. Among the national chains and franchisees that have announced that Obamacare is forcing them to reduce employee hours: Applebee’s, Buffalo Wild Wings, Del Taco, Denny’s, FatBurger, Five Guys, Hardee’s, IHOP, Olive Garden, Wendy’s, and White Castle.

Big business doesn’t look to fare much better. For instance, Delta Airlines has just announced that it expects its health-care costs to rise by as much as $100 million next year, in large part due to Obamacare. And, Forever 21, a national teenage-clothing chain, said in August that it will cut hours for all non-management staff to 29.5 hours a week.

The White House says such reports are purely anecdotal. But eventually enough anecdotes can look a great deal like a trend.

So let’s talk about credibility. If the president is truly worried about his, it may be time for him to revise his claims about Obamacare. Then again, if Republicans fail to follow through on efforts to kill this albatross, maybe their credibility will be questionable as well.