Each day seems to bring a new headline about Obamacare. UPS announces it will end health coverage for employee spouses. Trader Joe’s will stop offering health insurance for part-time employees. Meanwhile, the Obama administration announces it has delayed the deadline for reaching agreement with insurance plans that will take part in the new federal exchange. And the requirement that employers provide insurance for their employees has been delayed as well. Responding to these headlines, Republicans have been quick to proclaim that Obamacare isn’t working. Democrats have privately complained that it’s not working as well as they had hoped.
In fact, Obamacare is working exactly as it was designed to work. Yes, when viewed through the lens of health care or economics, the policy appears to be floundering. But the bill was never designed to fix the economics of health care. As has been noted by many economists, health care reform cannot increase the quality of coverage and access while simultaneously decreasing costs. By forcing people to buy insurance and by placing new requirements on insurers, the new law virtually guarantees that health insurance premiums will go up – and premiums have increased in most states. The White House certainly understood this when the bill was passed. And so did congressional Republicans. None of what has transpired in the last few months has surprised anyone in Washington, D.C. Even more interesting: Republicans and Democrats have created an unholy alliance to ensure that Obamacare continues to work just the way it is.
For most Democrats, of course, the goal has never been to help insurance companies make more money through greater demand or higher premiums. The goal has always been to find a way to get to a single-payer system. And the seeds of such a system have been planted well by Obamacare. The new law establishes exchanges where people without employer-provided health insurance can buy coverage with the assistance of government subsidies. No less an authority than the Senate majority leader, Democrat Harry Reid, has pointed to the exchange as a “step in the right direction” toward single-payer health care. For many Republicans, the goal has been to help businesses manage the escalating cost of health insurance. Ever since the wage controls of World War II resulted in businesses offering health insurance as a way of attracting workers, many American companies have been providing health care insurance to their employees.
But the costs are spiraling out of control. For several years now, Starbucks has spent more on health care for its employees than it spends on coffee for its customers. With the trend line on costs heading north, many businesses see Obamacare as a way out. By paying a fine and not offering employee health benefits – or by reclassifying employees as part time – businesses can escape the responsibility of paying for health insurance and ease their consciences with the knowledge that employees can turn to the exchanges. Sen. Ted Cruz (R-Texas) recently told Texas Monthly: “As long as there’s any credible place to push their employees, big companies are getting ready to dump their health insurance coverage. I mean, this thing isn’t working.” But it is working. It is working for Democrats because the embryonic version of a single-payer system is being put in place. And it is working for Republicans because their business constituents can stop paying health insurance premiums. The only people it doesn’t work for are the taxpayers who will have to finance a constantly growing and increasingly expensive federal health care program for generations to come.
Kasey S. Pipes is co-founder and partner of Corley Pipes, a government relations firm based in Fort Worth with offices in Washington, D.C. He previously served as an adviser to President George W. Bush, Gov. Arnold Schwarzenegger and Congresswoman Kay Granger. He can be reached at kasey@corleypipes