The battle over “Obamacare” continues to rage three years after it became law and just months ahead of when some of the most important parts of it are slated to take effect.
Most congressional Republicans remain dedicated to finding a way to scrap the Affordable Care Act and, in the short run, hope that its implementation turns into the “train wreck” that Senate Finance Committee chairman Sen. Max Baucus, D-Mont., spoke of a few months ago.
For those who want Obamacare to die, the messier its implementation and the uglier its consequences, the better. Chaos would put pressure on Congress to scrap the entire law.
But at least three Senate Republicans who voted against the law in 2010 are trying to fix it. Yet this “fix” would also lead to a cost shifting that would put more of Obamacare’s fiscal burden onto taxpayers.
The most important mandates in the law begin on Jan. 1. Key among them: the requirement that employers with 50 or more full-time workers pay penalties if they don’t offer health insurance to their staff. Even before then – starting on Oct. 1 – people who aren’t covered by an employer plan can apply for subsidies to purchase insurance.
Sen. Susan Collins, R- Maine, who voted against the Affordable Care Act in 2010, has joined with a Democrat who voted for it, Sen. Joe Donnelly of Indiana, to propose a bill changing the definition of full-time worker in the law from someone who works 30 hours a week to someone who works 40 hours a week. Co-sponsoring the bill are two other Republicans, Sen. Lisa Murkowski of Alaska and Sen. Tom Coburn of Oklahoma.
Alex Wong / Getty Images
Sen. Susan Collins, R-Maine, speaks to members of the press during a news conference in this file photo from May 23, 2013 on Capitol Hill.
Collins called it “the first bipartisan Senate bill to remedy a serious problem in our new health care law.”
Some members of Congress both on the right and the left don’t want any changes in the ACA, Collins said, but “when there is such a glaring error in the law, I think it’s incumbent upon us to try to fix it – not to allow harm to low-income wage earners and not to create problems for our business community at a time when unemployment is already high … .”
The definition of “full-time employee” in the ACA “would cause some employees to have their hours and thus their paychecks reduced,” Collins said. The 30-hour-a-week definition “creates a perverse and powerful incentive for employers to cut the hours their employees are allowed to work … .”
“It will result in a number of employees who will be losing income, who may have been at 32 hours and are now at 28 hours,” Donnelly said. “We’ve heard from folks in Indiana who have said, ‘Look, I was working 35 hours and I’m now going to be working 29 hours. This is going to make it more challenging for me.’”
For a firm with 100 full-time employees (defined as those working 30 or more hours a week) the penalty for not providing health insurance would be $140,000 a year.
The Congressional Budget office estimates that by 2018, employers will be paying $15 billion a year in penalties – that money is part of the revenue flow designed to help offset the new taxpayer outlays required by Obamacare.
The drafters of the law struck a balance between nudging employers to provide insurance coverage to more workers – while at the same recognizing that some of the people working fewer than the normal 40-hour week are already covered, some aren’t and some will need subsidies to buy insurance.
According to a study by the University of California at Berkeley’s Labor Center, about 9 percent of workers in firms of 100 or more work between 30 and 36 hours a week.
Among workers in this category, almost half now have employer-sponsored health insurance, about one fifth are uninsured, roughly another fifth get coverage through a family member, and the rest are either covered by a government plan such as Medicare or purchase their own insurance.
“Right now, many part-time workers are losing up to several hundred dollars a month as employers choose to cut hours to fall in line with the ACA definition of ‘full-time employee,’” said Donnelly’s spokeswoman Adrienne Watson.
If the Donnelly-Collins bill became law, Watson pointed out, part-time employees would have access to health insurance on the taxpayer-subsidized purchasing exchanges and could receive a tax credit to help purchase insurance.
The CBO estimates that by 2018, 25 million Americans will be covered by the insurance exchanges, with an average taxpayer-provided subsidy of nearly $6,000 per enrollee. The exchange subsidies and related spending will reach nearly $120 billion by 2018, the CBO says.
The Donnelly-Collins proposal has not yet been scored by the CBO, but one effect it might have is to reduce the revenue from penalties paid by employers – since there would be fewer employers subject to the insurance mandate.
The shifting of employees from an employer plan to the insurance exchanges – with many of them eligible for subsidies– would mean additional outlays by the government.
But Collins said that Obamacare’s 30-hour definition of a full-time worker would result in people working fewer hours and “that in turn means there will be fewer tax revenues flowing into the federal government.”
This story was originally published on Fri Jun 21, 2013 1:36 PM EDT