Obamacare pros and cons told through anecdotes…

With the Supreme Court ruling to uphold the Patient Protection and Affordable Care Act, colloquially known as Obamacare, the internet has gone absolutely bonkers disseminating misinformation on both the positives and negatives of the plan.  The political-right has unloaded an arsenal of sound bite torpedoes arguing that this new healthcare plan will destroy jobs and bring America’s health care system to its knees.  The opposing side has returned fire arguing that this new plan will save the American economy and not cause substantial damage to American businesses.  What will the new health care policy actually do?  Nobody knows for sure.  However, getting the basic pros and cons of the bill in a less strident tone may help bring some clarity to this important issue.  Here are a few anecdotes from employers discussing the pros and cons of the legislation.  

Cons:

In a recent testimony to Congress, Mary Miller, President/CEO of the Cincinnati based janitorial service company, JANCOA, voiced her concern that the new legislation will cost her company over 1.4 million dollars and force her to cut full time jobs. 

The JANCOA business model goes against normal industry employment practices by hiring nearly 98% of its 320 employees on a full time basis.  As full time employees, they have access to certain benefits including paid vacation time, holiday pay, and health care coverage.  JANCOA believes it is because employees are able to work full time and receive these benefits that account for their very low turnover rates and high customer satisfaction.

When the new health care legislation takes over in 2014, JANCOA will no longer be able to support as many full time employees. According to Miller, only 6% of eligible employees take advantage of the health insurance plans offered by her company, as they prefer to spend their money on other bills at home.  Because the Affordable Care Act forces companies to provide insurance to all full time employees, JANCOA will need to muster up the money to pay for this at the expense of other areas, including switching many full time employees to part time employees.  Miller touts her current business model allows her employees to buy houses, send their kids to college and essentially achieve the American dream.  For her company, Obama’s health care reform will end that dream for many of her employees.      

In this instance, the naysayers of Obama’s health legislation have a very valid fear.  People who currently have full time employment will have their jobs killed, or at the very least switched from full time to part time employment.   

Pros:

Since 1989, Massachusetts State Senator Daniel Wolf has run Cape Air, an air travel company with 1,000 full time employees.  In 2006, his company experienced firsthand the effects of the plan the Affordable Care act was based on, the loquaciously titled, An Act Providing Access to Affordable, Quality, Accountable Health Care.  When the Massachusetts law came into effect, there was the same amount of vitriol and fear over the legislation as is happening today with its federal version.  However, after the legislation took effect, aside from adding a few of his employee’s children who were under 26 to the insurance policy, Wolf said the procedure was “seamless.”

After Wolf implemented the new insurance plan, he saw the amount of annual premium increases dramatically lower.  Before the legislation came into effect, premiums raised an average of 15% a year at Cape Air; afterwards, it raised an average of under 5% a year.  Furthermore, Cape Air’s insurance plan has not produced a substantial hit to their profits.  This year, they plan to spend 3 million dollars on their insurance package, roughly 3% of their income.  Wolf states that it is partly because of Cape Air’s health insurance savings that he has been able to expand his company by 15% since the bill was enacted.  

Conclusion:

While both of these anecdotes offer only a glimpse of what might happen when Obama’s legislation is fully implemented, they do bring up some good points.  Jobs could be killed as employers can’t afford to provide health insurance to all of their full time employees.  Employees could watch their annual premiums rise at lower percentage points.  Whatever the future may bring, I just hope we can get through it together as a country and keep the sound bite torpedoes to a minimum.