Thursday, January 23, 2014

Target’s health-care decision actually helps employees

What was the point of adopting Obamacare if it was not going to transform the health-care landscape?

While foes of the new Affordable Care Act are seizing on Target’s announcement that it will no longer provide health coverage to part-time employees as proof that ACA is doing more harm than good, that view is shortsighted.

But true systemic change is not simple.  The point is, the system we had before Obamacare was broken, and its destructive impact on U.S. employment was never understood.  Our third-party payer system, where employers feel the brunt of insurance costs,  is a disaster that the ACA will eventually fix.

Target’s decision is a win-win-win-win situation. The employer wins by cutting its costs; employees win by gaining the chance for better coverage; insurance companies win by getting new customers; and prospective employees seeking a job win because perhaps Target can now afford to hire more of them.

“These part-time workers will most likely be better off under Obamacare plans, and Target’s decision to shift the employees into the marketplaces is definitive proof that the health law is  doing exactly what it’s intended to do,” reported the website Think Progress.

Numerous disincentives to third-party coverage were built into the law, mostly in the form of generous subsidies to individuals who buy their coverage at More and more employers will drop their coverage altogether, finding it more cost-effective to pay the fines rather than provide the coverage. But that is exactly the point. Why should employers be providing the coverage in the first place? We don’t expect them to insure our homes or cars. This is precisely what was wrong with our system in the first place, and you can find this assertion at conservative think tanks if you dig deep enough into their archives.

Both sides are guilty of oversimplifying ACA’s groundbreaking impact, not the lest of which was President Obama’s claim that you could keep your insurance if you liked it. Most people will, but to claim a major reform is not so major after all misses the whole point.

Obamacare is giving us all lessons in economics and health coverage. The sooner we learn them, the better off we will be. Then we can focus on continuing to change and improve the system.

1 comment:

  1. One of the awesome information about Target’s health-care decision actually helps employees .Thanks for the nice information about this.