ObamaCare Cost Update: $5k more per year than predicted, and untold numbers of jobs

Two pieces of ObamaCare news:

(1) Health insurance premiums are up approximately $3,000 per year per family; Obama had promised that he would “bend the cost curve down” and that they would be down about $2,500 per year.

(2) Small businesses rate ObamaCare as their biggest challenge, ahead of foreign competition, energy costs, and regulatory costs.   Two-thirds of small businesses and manufacturers say that ObamaCare will increase their health care costs.  Other assorted bad news is at the link. (Hat tip: Wintery Knight.)

To be entirely childish: Told you so.

All this talk about giving fifty million people more health care and spending less money?  Obvious rubbish.  Of reforming health care to save us all money on our premiums?  Absurd.  “If you like your health insurance, you can keep it”?  Not if your health insurance is an inexpensive catastrophic plan, paired with a HSA, or not if your doctor retires, or if your plan doesn’t include “free” morning after pills.

Another day, another lawsuit over ObamaCare

Hobby Lobby stores, a Christian-oriented business, filed for an injunction against the enforcement of ObamaCare’s mandate that employer-sponsored health insurance must cover the morning-after pill.  (Hat tip: The Times & Democrat.) Hobby Lobby’s objection is that the morning-after pill often works by preventing the embryo from implanting.

Money is fungible.  Any Hobby Lobby employee who wants to buy the morning-after pill may use part of her salary to do so.   In a world in which employees are paid in fungible money, not in goods and services, this mandate is absurd.  There is no rational connection between employment in a toy-supply company and a person’s sex life – or at least that is the premise of every single pro-privacy and anti-harassment law out there.

The only reason that companies like Hobby Lobby are suing the federal government is because the federal government created distorted incentives for employers to provide health insurance.  Once that happened, the government regulated the ways in which such employers could provide health insurance, including the current morning-after pill requirement.

McKinsey Survey: 30% of employers will stop offering health insurance in 2014

According to a survey by McKinsey Quarterly, approximately 30% of employers who provide health insurance to their employees will drop coverage after 2014, instead opting to pay a penalty and/or increase wages.

McKinsey explains that many employers will offer increased compensation to their employees if their health care plans are dropped; however, such thinking underestimates the ways in which employees undervalue their compensation packages.  On the average, employers spend 43 cents on benefits per dollar of payroll; however, employees only value about half of that. (Here is a comprehensive list of the non-payroll costs that employers pay.)   Should employers cut back on health insurance, their employees may demand a higher salary – but not high enough to cover their costs.

As conservatives, we often point out that employer-provided health insurance, matched FICA taxes, and unemployment insurance mask the true cost of those benefits. If employers dump their employees onto state exchanges, they can likely get away with offering less money in an increased salary than they had been paying out in employer-sponsored health insurance.  Employees who know the value of their benefits and make their salary requests accordingly may find themselves priced out of the market. It’s not a very employee-friendly result, but is a very likely one.