Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

Only Corporate Lawyers and The Most Sophisticated HR People Understand How Obama Care Really Works
Instapundit ^ | 2/17/2013 | Letter to Instapundit

Posted on 02/17/2013 4:34:58 PM PST by sgtyork

I don’t know if you will see this in your volume of email, but you might.

I am deeply into studying the impact of Obamacare on employers, and I have been communicating with highly sophisticated ERISA lawyers who are advising employers, from Fortune 50 companies to small firms under 50 employees, on whether to keep or drop or modify their employer group health plans.

It has become very clear to everyone involved who is analytical and not ideological that the rational strategy, for both large and small firms, is to cease providing health care insurance to employees.

No company wants to admit that they are considering eliminating health insurance as an option, or be the first one to drop their health insurance plan, but once a competitor does so, the preference cascade will begin. The clear sentiment is “We will not be the first one to drop our health insurance plan, but we would be a close second.”

The coming preference cascade for employer group health plans is what the Democrats fear the most, because Obamacare was sold to the masses as “if you like your health insurance plan, you can keep it.”

The people who really know the law, and who have been following the avalanche of regulations, have already figured this out. It will take a while for this specialized knowledge to seep downward, because right now only $800+ an hour ERISA attorneys and the most sophisticated HR people understand how Obamacare really works.


TOPICS: Business/Economy; News/Current Events
KEYWORDS: obamacare
So. How does one invest in the coming cascade of employers dumping health care?
1 posted on 02/17/2013 4:35:04 PM PST by sgtyork
[ Post Reply | Private Reply | View Replies]

To: sgtyork
It has become very clear to everyone involved who is analytical and not ideological that the rational strategy, for both large and small firms, is to cease providing health care insurance to employees.

They should never have been providing it in the first place, any more than they should have been providing automobile insurance.

That they do provide health insurance is a legacy of FDRs wage and price freezes.

2 posted on 02/17/2013 4:39:17 PM PST by E. Pluribus Unum ("Somebody has to be courageous enough to stand up to the bullies." --Dr. Ben Carson)
[ Post Reply | Private Reply | To 1 | View Replies]

To: sgtyork

Two goals are accomplished with obama care, the first is to push demand towards “single payer” ie government health care by ruining the system.The second is to have such a maze of regulations that you have to retain a lawyer in order to navigate system. Can you say trail lawyer payoff?


3 posted on 02/17/2013 4:51:54 PM PST by bonehead4freedom
[ Post Reply | Private Reply | To 1 | View Replies]

To: sgtyork; All

A question for all; has anyone bought that book being advertised on TV “Surviving 0bama Care?” If so is it any good?


4 posted on 02/17/2013 5:15:24 PM PST by TigersEye (The irresponsible should not be leading the responsible.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: sgtyork
"It has become has or will become very clear to everyone involved who is analytical and not ideological that the rational strategy, for both large and small firms, health care providers, suppliers, R&D firms and related services is to cease providing health care insurance to employees business in the health care field."
5 posted on 02/17/2013 5:22:36 PM PST by TigersEye (The irresponsible should not be leading the responsible.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: TigersEye

So sell some of these short? When will the avalanche occur?


6 posted on 02/17/2013 5:30:30 PM PST by sgtyork (The secret of happiness is freedom, and the secret of freedom, courage. Thucydides)
[ Post Reply | Private Reply | To 5 | View Replies]

To: sgtyork

And the corollary to businesses dropping 0-care, is that many if not most healthy individuals will opt for the tax/penalty instead of purchasing the insurance. Because of ‘guaranteed issue’, an individual would be wise to wait until after they suffer a serious injury or develop a major medical condition. In the meantime, for minor illnesses, the rational choice will be to pay out of pocket. Just think of this, if you are a 20 or 30 something and you get really sick, and couldn’t work, in all likelihood, you would qualify for Medicaid because at that age, you have few assets.
As individuals eschew the exchanges, only the sickest will bother to enroll, pushing the price up and destabilizing the insurance market. Insurers will call for ever higher tax/ penalties to force more individuals to spread the risk on the exchanges. But, can you imagine the spectacle of insurers calling for higher tax/ penalties? There’s not a chance for that politically.
It seems likely that the tax/penalty cost, as indicated in the 0-care law, will be outstripped by the rise in insurance prices. In my view, this could result in an opportunity for private insurers to offer low cost insurance (non-0-care qualified) to low risk consumers. Even with the cost of the mandate/tax, such a plan may make sense. We will have to see where prices end up, as this will be the determining factor. Total implosion of the insurance industry is also a possibility. As for single payor, with total nationalization, I have my doubts. We are so broke, that any suggestion of a single payor would likely tank the dollar, and then everything implodes.


7 posted on 02/17/2013 5:36:55 PM PST by grumpygresh (Democrats delenda est.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: TigersEye; Grampa Dave; tubebender; ElkGroveDan; ScottinSacto; calif_reaganite; Jayster; ...
Yes! And YES!!!

This letter writer has it figured it out just about right, as well... I think I just read a thread title that said Obama has initiated things that he will have little control of and I think I'll go read it now.

All this is so disheartening after a 50 year successful career in helping both individuals and employers resolve health expense issues with carefully crafted financial insurance to control the risks for all involved in a free society!!!

I used to believe, like Winston Churchill, that Americans usually end up making the right decisions... after they've tried all the alternatives!

Now I just sit in awe at the depths of stupidity!!!

8 posted on 02/17/2013 5:36:55 PM PST by SierraWasp (Mark Twain said: "It's easier to fool someone than to convince them they've been fooled!!!)
[ Post Reply | Private Reply | To 4 | View Replies]

To: sgtyork
The people who really know the law, and who have been following the avalanche of regulations, have already figured this out. It will take a while for this specialized knowledge to seep downward, because right now only $800+ an hour ERISA attorneys and the most sophisticated HR people understand how Obamacare really works.
Umm, false.

People on Free Republic were warning about this during the entire Obamacare debate. The information was available to anyone who was paying attention.

9 posted on 02/17/2013 5:37:53 PM PST by Bratch
[ Post Reply | Private Reply | To 1 | View Replies]

To: SierraWasp
I can imagine how all this must make you feel after a career like that. Then I imagine the tens of thousands in health care today who are or will soon be very disheartened. The regulations and punitive actions are so onerous I have trouble seeing how even the most dedicated and selfless doctor will be able to hang on. Some people are willing to live on nothing but no one can afford to pay to stay in their career.

Thanks for the answer on the book! Its very existence is a condemnation of 0bamaCare.

10 posted on 02/17/2013 6:00:18 PM PST by TigersEye (The irresponsible should not be leading the responsible.)
[ Post Reply | Private Reply | To 8 | View Replies]

To: sgtyork

Which is why I cannot understand why the insurance industry supported this travesty.


11 posted on 02/17/2013 6:24:46 PM PST by driftdiver (I could eat it raw, but why do that when I have a fire.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: driftdiver
Which is why I cannot understand why the insurance industry supported this travesty.

I think it's because they saw a windfall position for themselves not so much as insurance providers but as middlemen between the health care industry and the government.

I don't know how they keep their spot on the gravy train once the feds take over everything, unless it is as a kind of consultant/facilitator/kickback industry...which of course is how the rest of Washington runs.

12 posted on 02/17/2013 6:50:17 PM PST by Fightin Whitey
[ Post Reply | Private Reply | To 11 | View Replies]

To: sgtyork

Free cell phones = free health care


13 posted on 02/17/2013 6:57:53 PM PST by blueunicorn6 ("A crack shot and a good dancer")
[ Post Reply | Private Reply | To 1 | View Replies]

To: Fightin Whitey
I don't know how they keep their spot on the gravy train once the feds take over everything, unless it is as a kind of consultant/facilitator/kickback industry...which of course is how the rest of Washington runs.

Consider the role of insurance companies in Medicare: Offering supplemental insurance to cover the 20% that Medicare doesn't cover.

There is a lot of competition in the market, so itis pressumably profitable, even though coverage cannot be denied.

14 posted on 02/17/2013 7:01:25 PM PST by okie01 (The Mainstream Media: IGNORANCE ON PARADE)
[ Post Reply | Private Reply | To 12 | View Replies]

To: sgtyork

15 posted on 02/17/2013 7:08:56 PM PST by Lorianne (fedgov, taxporkmoney)
[ Post Reply | Private Reply | To 1 | View Replies]

To: sgtyork

For fun...google “betrayed by obamacare” what you will see will amaze you....

Look at all the groups that made headlines as being betrayed by obamacare.


16 posted on 02/17/2013 7:12:05 PM PST by EBH ( The 2nd Amendment exists for times like this.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: okie01

You are definitely right that the industry has shown that it can turn a profit on the margins of federal health care.

But that doesn’t explain why the industry would have climbed aboard Obamacare. And to me it seems like very small potatoes compared to the billions of dollars in regular coverage the companies offer now, and that all might be wiped out by taxpayer-funded “insurance”.

What the medicare supplement example makes me wonder is whether a free-market option for insurance will continue to exist, in which people who take care of themselves, who are willing to pay market prices, who are eager to go to self-designated physicians who only want to accept free-market payments...that is what I would like to see.


17 posted on 02/17/2013 7:28:33 PM PST by Fightin Whitey
[ Post Reply | Private Reply | To 14 | View Replies]

To: sgtyork

The whole point of Obamacare is to destroy the private health insurance system and force everyone into federal single-payer of some sort. It’s all about power for the federal government and thereby the Democrats as the party of government.


18 posted on 02/17/2013 7:31:51 PM PST by Thud
[ Post Reply | Private Reply | To 1 | View Replies]

To: driftdiver
Which is why I cannot understand why the insurance industry supported this travesty.

Think about it.

It's a great short-term financial boost for the insurance industry because of the government mandate. If the U.S. government were to pass a law requiring every adult in the U.S. to buy a new car every year, you can be damn sure that the auto industry would be 100% behind it.

In the long term, the insurance industry benefits from the end of employer-sponsored health insurance because the industry will basically be going out of business as the demographic shift in the U.S. population makes it more difficult for them to stay in business anyway. As others have pointed out here on FreeRepublic many times over the years, medical insurance as we know it in the U.S. is a house of cards waiting to collapse.

19 posted on 02/17/2013 8:06:59 PM PST by Alberta's Child ("I am the master of my fate ... I am the captain of my soul.")
[ Post Reply | Private Reply | To 11 | View Replies]

To: sgtyork; All

The purpose of Obama’care’ is to Nationalize the Medical and Medical Insurance Industries so that the income from these Industries can help pay for Medicare, Medicaid, Social Security, No Child Left behind, Food Stamps, unemployent payments, Aid to Dependent Children, Free Cell phones to the non-working poor, etc., etc., etc.

Oh yeah, and Midnight Basketball for Inner City Children. Well, not all cities as Mayor Emanuel of Chicago is allowing turf wars in some of the communities that Obama organized, years and years ago.

Duh, did Obama BUILD those communities? No wonder he was given the Nobel Peace Prize!


20 posted on 02/17/2013 9:26:54 PM PST by Graewoulf ((Traitor John Roberts' Commune Obama"care" violates Anti-Trust Law s, AND the U.S. Constitution.))
[ Post Reply | Private Reply | To 1 | View Replies]

To: bonehead4freedom
"Can you say trail lawyer payoff?"Nope! But I can say TRIAL lawyer payoff.
21 posted on 02/18/2013 12:54:17 AM PST by Richard Brandon Abroad
[ Post Reply | Private Reply | To 3 | View Replies]

To: Fightin Whitey
I don't know how they keep their spot on the gravy train once the feds take over everything

What was it Lenin said about capitalists and hemp?

22 posted on 02/18/2013 1:04:31 AM PST by cynwoody
[ Post Reply | Private Reply | To 12 | View Replies]

To: sgtyork

Well, this will be fun to watch anyway. Let’s see how many employers raise the salaries of their employees when they drop insurance.

After all, “it’s part of the salary”...LOL! I’m willing to bet that most said employees end up with no insurance, no pay increase, and paying hundreds of dollars a month for a private policy. This will be just stellar for the economy.

Even if some decent companies step up and offer a few hundred a month in additional pay, people will be SHOCKED to discover what small business owners already know...it will cost them the equivalent of another mortgage payment to insure their family without a group policy.


23 posted on 02/18/2013 1:21:06 AM PST by garandgal
[ Post Reply | Private Reply | To 1 | View Replies]

To: E. Pluribus Unum
They should never have been providing it in the first place, any more than they should have been providing automobile insurance.

I wonder how costs and wages would have differed if they had bumped pay to make up for lack of spending on insurance. Initially, it would seem that both company and employee benefited from lowers costs/tax breaks, but the "tax breaks" part tells me that it would probably have been more efficient if they had stayed out of it.

24 posted on 02/18/2013 5:14:24 AM PST by trebb (Allies no longer trust us. Enemies no longer fear us.)
[ Post Reply | Private Reply | To 2 | View Replies]

To: bonehead4freedom

-——Can you say trail lawyer payoff-——

Not a pay off but further infliction of tyranny. America has ceased being a nation of laws. America has bacome a nation of lawyers.

America is controlled by a tyranny of lawyers.

“We twist the law to make it be what ever we want. That’s our Job” Allie Mc Beal


25 posted on 02/18/2013 5:22:28 AM PST by bert ((K.E. N.P. N.C. +12 .....The fairest Deduction to be reduced is the Standard Deduction)
[ Post Reply | Private Reply | To 3 | View Replies]

To: trebb
"Efficient government" is an oxymoron, except in the case of mass-murder.
26 posted on 02/18/2013 7:19:05 AM PST by E. Pluribus Unum ("Somebody has to be courageous enough to stand up to the bullies." --Dr. Ben Carson)
[ Post Reply | Private Reply | To 24 | View Replies]

To: E. Pluribus Unum
"Efficient government" is an oxymoron, except in the case of mass-murder.

No arguments here. Every time government gets involved, costs go up, corruption abounds, and efficiency goes down the drain.

27 posted on 02/18/2013 8:40:29 AM PST by trebb (Allies no longer trust us. Enemies no longer fear us.)
[ Post Reply | Private Reply | To 26 | View Replies]

To: Fightin Whitey
But that doesn’t explain why the industry would have climbed aboard Obamacare. And to me it seems like very small potatoes compared to the billions of dollars in regular coverage the companies offer now, and that all might be wiped out by taxpayer-funded “insurance”.

We are in the midst of a period where the larger business interests are scared shitless of the federal government.

Small business can afford to maintain principles and take issue with the federal government on an individual basis.

The individuals who run the larger businesses -- counting their top corporate officials and boardmembers -- dare not get cross-wise with the feds. Their corporations and their careers can get wiped out by one edict or decree. On purpose...or totally by accident.

As a consequence, they are prone to value judgments that will accept guaranteed crumbs from the federal table rather than openly defy this particular regime -- and risk everything.

Our federal government has grown far too powerful. And it has fallen into the hands of latent totalitarians.

28 posted on 02/21/2013 5:57:01 PM PST by okie01 (The Mainstream Media: IGNORANCE ON PARADE)
[ Post Reply | Private Reply | To 17 | View Replies]

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson