January 10 2014
Why Obama's Promise That Americans Could Keep Their Insurance Was So Important
Carrie L. Lukas
Most Americans opposed ObamaCare when the legislation was being debated and a majority continue to oppose the law today. Yet millions of Americans did support the idea of major health care reform in 2009 and still do for a noble reason: They know that some Americans fell through the cracks of the previous system and faced real hardship. They wanted to help.
That’s why in spite of most Americans being satisfied with their own situation, they are concerned about the health care system as a whole. A new Rasmussen report, for example, found that more than eighty percent of those surveyed rated the quality of care they receive as good or excellent and also rated their insurance coverage as good or excellent. Yet only one-third gave the health care system overall such a positive rating, while more than 30 percent consider it “poor.”
Americans want our health care system to work for everyone. That’s why President Obama’s promise that Americans who liked their insurance would keep it under ObamaCare was so important. People wanted change to help others, but didn’t want to lose what worked for them. The President sold ObamaCare as being all upside: He could cover the uninsured, protect those with pre-existing conditions, lower annual premiums by thousands of dollars a year for everyone else, all while reducing the federal debt. It’s a wonder he didn’t promise free ice cream, too.
Of course, that vision was a fairytale, as we are now acutely aware. In retrospect, it was never plausible that such massive, sweeping reforms would only impact a small segment of the population and hold everyone else harmless. As the law’s critics had argued all along, ObamaCare contains mandates dictating what every insurance policy in the country must cover and how all insurance plans must be priced. Of course, everyone would be affected by design. And many would be left worse off than before.
Most disappointingly, Americans are learning that those who were the primary impetus for the law in the first place—those who couldn’t get insurance and access care—aren’t even necessarily better off. Even after full implementation, tens of millions are expected to remain uninsured, and millions of newly insured are just being added to a broken Medicaid system. Too many of these new Medicaid enrollees will find that, while they may have insurance, they still have trouble accessing care because of too much demand and too short of a supply of doctors willing to take Medicaid.
Americans should keep this lesson in mind as they hear debates about more new government programs and interventions. New laws tend to be sold as helping those who truly face hardship and challenges. Proponents focus on the benefits provided to those sympathetic individuals and ignore the many other very real, though often less obvious, impacts of the proposal.
Take the “Family and Medical Insurance Leave Act” or the FAMILY Act, which was recently introduced by Democrats in Congress. This legislation would dramatically expand the Family and Medical Leave Act to create a federal entitlement program to provide paid-leave to qualified workers. Workers would be entitled to 60 days of family and medical leave per year during which they would receive two-thirds of their average pay from the federal government.
Proponents claim this would be an inexpensive program providing needed assistance to those who currently lack paid-leave, and would particularly benefit women by providing paid maternity leave. Undoubtedly, they will point to real-life, tear-jerking examples of people who would benefit from this new entitlement: A single mom working hard for $30,000 a year, but who lacks paid leave and whose child has just come down with cancer. That’s heartbreaking. A young married couple struggling to get by as both parents work; after a difficult C-section birth, the women needed to take time off to recover but didn’t have paid leave. Now they are facing bankruptcy. Again, it’s heartbreaking.
Of course, everyone wants to help those people. We want a system that takes care of those in trouble. Yet before signing on to sweeping legislation that would create a new federally-administrated, national entitlement program and effectively change the employment contract of 140 million working Americans, people should ask, isn’t there a more targeted way to help those facing such instances of hardship?
After all, while some will benefit from the new entitlement program, others will pay a considerable cost. Beyond the new payroll tax to fund the new benefit, there are other costs that will impact wages and employment opportunities, particularly for women. Knowing that any worker facing a medical issue can take up to three months of paid leave creates a new, big risk for employers. While the federal government would pick up the direct cost of workers’ wages, businesses would still have to identify and train a replacement, or shift work to remaining employees. That can result in significant lost productivity, particularly for very small businesses.
Given that women, particularly women of childbearing age, are more likely to qualify for and take extended medical leave, employers may be reluctant to consider such women for senior positions with significant responsibilities. This is particularly unfair to women who do not want or are unable to have children. The expectation that women are likely to take off three months from their jobs may unnecessarily hamper their career prospects.
More than 80 percent of full-time workers already have access to some form of paid leave. While they will likely be assured that those who like their benefit packages will be able to keep them, they should be warned that a new federal entitlement program would encourage businesses currently providing paid leave programs—including more generous leave packages—to cease doing so. Companies and employees would also be less likely to seek mutually beneficial arrangements, such as part-time and work-from-home options, during periods of leave.
A key lesson from ObamaCare is that major new laws and new entitlement programs impact everyone, not just those who receive checks from the federal government. And the biggest costs often dwarf the direct new taxes that are imposed.
Americans should be proud of their instinct to want to help fellow citizens facing hardship. Yet they shouldn’t let that sympathy cloud their understanding of how big laws impact all of society, and often create more problems than they solve.
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