Coyote Blog

I have to say I told you so, but, from a reader, Staples threatens to fire anyone who works over 25 hours:

Part-time Staples workers are furious that they could be fired for working more than 25 hours a week.

The company implemented the policy to avoid paying benefits under the Affordable Care Act, reports Sapna Maheshwari at Buzzfeed. The healthcare law mandates that workers with more than 30 hours a week receive healthcare.

If Staples doesn't offer benefits, it could be fined $3,000 in penalties per person.

I can tell you from personal experience that $3000 is a staggering penalty.  For a full time worker at $8 an hour, this is over 2 months pay -- 2 months pay extra the company has to pay but the worker never sees.

As I have written before, we have moved heaven and Earth to get every employee we can in our company converted to part-time.  We had absolutely no alternative -- after seeking quotes from about 20 places, no one would offer our company any sort of health insurance plan at any price**.  So no matter what we did, we were facing the $3000 penalty for each full-time workers, so all we could do to manage the situation was convert full-time workers to part-time.

** We have seasonal workers, which makes insuring us awkward and expensive because there are high administrative costs with people constantly going on and off the plan.  We also have a very old work force.  Obamacare prevents insurers from charging the much higher premiums to older people that our costs might justify -- it milks younger people with prices well above their cost to serve to pay for subsidizing older people.  Insurers would be crazy to voluntarily add groups that are purely old people, they would lose their shirt.  So they refuse to quote us.

From Atlas Shrugged:

Dr. Ferris smiled. . . . . ."We've waited a long time to get something on you. You honest men are such a problem and such a headache. But we knew you'd slip sooner or later - and this is just what we wanted."

[Hank Reardon:]  "You seem to be pleased about it."

"Don't I have good reason to be?"

"But, after all, I did break one of your laws."

"Well, what do you think they're for?"

Dr. Ferris did not notice the sudden look on Rearden's face, the look of a man hit by the first vision of that which he had sought to see. Dr. Ferris was past the stage of seeing; he was intent upon delivering the last blows to an animal caught in a trap.

"Did you really think that we want those laws to be observed?" said Dr. Ferris. "We want them broken. You'd better get it straight that it's not a bunch of boy scouts you're up against - then you'll know that this is not the age for beautiful gestures. We're after power and we mean it. You fellows were pikers, but we know the real trick, and you'd better get wise to it. There's no way to rule innocent men. The only power any government has is the power to crack down on criminals. Well, when there aren't enough criminals, one makes them. One declares so many things to be a crime that it becomes impossible for men to live without breaking laws. Who wants a nation of law-abiding citizens? What's there in that for anyone? But just pass the kind of laws that can neither be observed nor enforced nor objectively interpreted - and you create a nation of law-breakers - and then you cash in on guilt. Now, that's the system, Mr. Rearden, that's the game, and once you understand it, you'll be much easier to deal with."

Here is the same thing, Obama Administration style

Major U.S. corporations have broadly supported President Barack Obama's healthcare reform despite concerns over several of its elements, largely because it included provisions encouraging the wellness programs.

The programs aim to control healthcare costs by reducing smoking, obesity, hypertension and other risk factors that can lead to expensive illnesses. A bipartisan provision in the 2010 healthcare reform law allows employers to reward workers who participate and penalize those who don't.

But recent lawsuits filed by the administration's Equal Employment Opportunity Commission (EEOC), challenging the programs at Honeywell International and two smaller companies, have thrown the future of that part of Obamacare into doubt.

The lawsuits infuriated some large employers so much that they are considering aligning themselves with Obama's opponents, according to people familiar with the executives' thinking.

"The fact that the EEOC sued is shocking to our members," said Maria Ghazal, vice-president and counsel at the Business Roundtable, a group of chief executives of more than 200 large U.S. corporations. "They don't understand why a plan in compliance with the ACA (Affordable Care Act) is the target of a lawsuit," she said. "This is a major issue to our members."

At the exact same moment, one branch of the Administration is encouraging an activity that another branch is working to criminalize.

We received a letter from Blue Cross / Blue Shield of AZ saying we could keep our plan, but the cost goes from about $579 a month to $739 a month in January of 2015 (a 27.6% increase).  Note that this is for a pretty high deductible health plan, something like $5000.  We wrote to our broker to explore options.  We got this response:

Crazy as this latest BC [Blue Cross] rate increase is it is a lot better than Obamacare.  I ran the same plan under the Affordable Care Act with BC and the rate for 1/1/15 would be $963.70 a month and if you went to the $6300 deductible plan the rate would still be $914 a month.  So I guess we are all lucky to be out of ACA until we are forced into it.  Now there is one variable that could lower your cost and that is if your household income in 2015 will be under $92k you could go into the Marketplace for premium assistance from our wonderful Federal government. If it is going to be higher than that be grateful you are where you are!

As predicted in advance, Obamacare and the exchange are not about saving money.  The only people who are saving money are those getting taxpayer subsidies in the exchange.

With our new prosthetic memory, called the Internet, it should be easy to go back and look at past predictions and see how well those predictions played out.  Heck, sports talk radio hosts do it all the time, comparing their beginning of season predictions with what actually happened.  But no one ever seems to hold the government or politicians similarly accountable.

Here is one I found by accident.  In July of 2011, Kevin Drum quotes this prediction from the CMS (Center for Medicare and Medicaid Services, a government agency).

In 2014, the Affordable Care Act will greatly expand access to insurance coverage, mainly through Medicaid and new state health insurance exchanges which will facilitate the purchase of insurance. The result will be an estimated 22.9 million newly insured people.

In March of 2014 Kevin Drum quotes this from the LA Times

As the law's initial enrollment period closes, at least 9.5 million previously uninsured people have gained coverage. Some have done so through marketplaces created by the law, some through other private insurance and others through Medicaid, which has expanded under the law in about half the states.

The tally draws from a review of state and federal enrollment reports, surveys and interviews with insurance executives and government officials nationwide.

....Republican critics of the law have suggested that the cancellations last fall have led to a net reduction in coverage. That is not supported by survey data or insurance companies, many of which report they have retained the vast majority of their 2013 customers by renewing old policies, which is permitted in about half the states, or by moving customers to new plans.

This is presented as a great victory, but in fact it is nearly 60% below expectations of less than two years earlier.  We don't know the final number.  Drum, who should be expected to be on the optimistic end of projections, has upped his estimate to 11-13 million, but this is still barely half what was expected.   The disastrous Obamacare exchange rollout did one thing at least -- it hammered expectations so low that even a 50% miss is considered a great victory.

One of the great dangers of historical analysis is applying our modern standards and ex post facto knowledge to analysis of historical decisions.  For example, I see modern students all the time assume that the Protestant Reformation was about secularization, because that is how we think about religious reform and the tide of trends that were to follow a century or two later.  But tell John Calvin's Geneva it was about secularization and they would have looked at you like you were nuts (If they didn't burn you).  Ditto we bring our horror for nuclear arms developed in the Cold War and apply it to decision-makers in WWII dropping the bomb on Hiroshima.  I don't think there is anything harder in historical analysis than shedding our knowledge and attitudes and putting ourselves in the relevant time.

Believe it or not, it does not take 300 or even 50 years for these problems to manifest themselves.  They can occur in just four.  Take the recent Halbig case, one of a series of split decisions on the PPACA and whether IRS rules to allow government subsidies of health care policies in Federal exchanges are consistent with that law.

The case, Halbig v. Burwell, involved the availability of subsidies on federally operated insurance marketplaces. The language of the Affordable Care Act plainly says that subsidies are only available on exchanges established by states. The plaintiff argued this meant that, well, subsidies could only be available on exchanges established by states. Since he lives in a state with a federally operated exchange, his exchange was illegally handing out subsidies.

The government argued that this was ridiculous; when you consider the law in its totality, it said, the federal government obviously never meant to exclude federally operated exchanges from the subsidy pool, because that would gut the whole law. The appeals court disagreed with the government, 2-1. Somewhere in the neighborhood of 5 million people may lose their subsidies as a result.

This result isn’t entirely shocking. As Jonathan Adler, one of the architects of the legal strategy behind Halbig, noted today on a conference call, the government was unable to come up with any contemporaneous congressional statements that supported its view of congressional intent, and the statutory language is pretty clear. Members of Congress have subsequently stated that this wasn’t their intent, but my understanding is that courts are specifically barred from considering post-facto statements about intent.

We look at what we know NOW, which is that Federal health care exchanges operate in 37 states, and that the Federal exchange serves more customers than all the other state exchanges combined.  So, with this knowledge, we declare that Congress could not possibly meant to have denied subsidies to more than half the system.

But this is an ex-post-facto, fallacious argument.  The key is "what did Congress expect in 2010 when the law was passed", and it was pretty clear that Congress expected all the states to form exchanges.  In fact, the provision of subsidies only in state exchanges was the carrot Congress built in to encourage states to form exchanges. (Since Congress could not actually mandate states form exchanges, it has to use such financial carrots and stick.  Congress does this all the time, all the way back to seat belt and 55MPH speed limit mandates that were forced on states at the threat of losing state highway funds.  The Medicaid program has worked this way with states for years -- and the Obamacare Medicare changes follow exactly this template of Feds asking states to do something and providing incentives for them to do so in the form of Federal subsidies).  Don't think of the issue as "not providing subsidies in federal exchanges."  That is not how Congress would have stated it at the time.  Think of it as "subsidies are not provided if the state does not build an exchange".  This was not a bug, it was a feature.  Drafters intended this as an incentive for creating exchanges.  That they never imagined so many would not create exchanges does  not change this fact.

It was not really until 2012 that anyone even took seriously the idea that states might not set up exchanges.  Even as late as December 2012, the list was only 17 states, not 37.  And note from the linked article the dissenting states' logic -- they were refusing to form an exchange because it was thought that the Feds could not set one up in time.  Why?  Because the Congress and the Feds had not planned on the Federal exchanges serving very many people.  It had never been the expectation or intent.

If, in 2010, on the day after Obamacare had passed, one had run around and said "subsidies don't apply in states that do not form exchanges" the likely reaction would not have been "WHAT?!"  but "Duh."  No one at the time would have thought that would "gut the whole law."

Postscript:  By the way, note how dangerous both the arguments are that opponents of Halbig are using

1. The implementation of these IRS regulations are so big and so far along that it would be disruptive to make them illegal.  This means that the Administration is claiming to have the power to do anything it wants as long as it does it faster than the courts can work and makes sure the program in question affects lots of people
2. The courts should give almost unlimited deference to Administration interpretations of law.  This means, in effect, that the Administration rather than the Courts are the preferred and default interpreter of law.  Does this make a lick of sense?  Why have a judiciary at all?

The Washington Post reports on an updated CBO report:

The Affordable Care Act will reduce the number of full-time workers by more than two million in coming years, congressional budget analysts said Tuesday in the most detailed analysis of the law’s impact on jobs.

After obtaining coverage through the health law, some workers may forgo employment, while others may reduce hours, according to a report by the Congressional Budget Office. Low-wage workers are the most likely to drop out of the workforce as a result of the law, it said. The CBO said the law’s impact on jobs mostly would be felt after 2016.

This almost certainly underestimates the impact.   Why?  Well, one reason is that a lot of full-time jobs were switched to part-time jobs way back in late 2012.  That is what our company did.  Why so early?  Because according to rules in place at the time (rules that have since been delayed at least a year) the accounting period for who would be considered full-time for the purpose of ACA penalties would be determined by an accounting period that started January 1, 2013.  So, if a business wanted an employee to be considered part-time on January 1, 2014 (the original date employer sanctions were to begin), the changes to that employees hours had to be put in place in late 2012.  More on this here in Forbes.

In addition, this CBO report is  a static analysis of existing business.  It does not seem to include any provisions for businesses that have dialed back on investment and expansion in response to the ACA (we have certainly cut back our planned investments, and we can't be the only ones.)  This effect is suggested (but certainly not proven) by this chart.

The sequester and government shutdown were cited by the Left as reasons for a sluggish economy.  Which government action seems most correlated with a flattening in job growth?

Via the NYT:

Many in New York’s professional and cultural elite have long supported President Obama’s health care plan. But now, to their surprise, thousands of writers, opera singers, music teachers, photographers, doctors, lawyers and others are learning that their health insurance plans are being canceled and they may have to pay more to get comparable coverage, if they can find it.

They are part of an unusual informal health insurance system that has developed in New York in which independent practitioners were able to get lower insurance rates through group plans, typically set up by their professional associations or chambers of commerce. That allowed them to avoid the sky-high rates in New York’s individual insurance market, historically among the most expensive in the country....

The predicament is similar to that of millions of Americans who discovered this fall that their existing policies were being canceled because of the Affordable Care Act. Thecrescendo of outrage led to Mr. Obama’s offer to restore their policies, though some states that have their own exchanges, like California and New York, have said they will not do so.

But while those policies, by and large, had been canceled because they did not meet the law’s requirements for minimum coverage, many of the New York policies being canceled meet and often exceed the standards, brokers say. The rationale for disqualifying those policies, said Larry Levitt, a health policy expert at the Kaiser Family Foundation, was to prevent associations from selling insurance to healthy members who are needed to keep the new health exchanges financially viable.

Siphoning those people, Mr. Levitt said, would leave the pool of health exchange customers “smaller and disproportionately sicker,” and would drive up rates.

Alicia Hartinger, a spokeswoman for the Centers for Medicare and Medicaid Services, said independent practitioners “will generally have an equal level of protection in the individual market as they would have if they were buying in the small-group market.” She said the president’s offer to temporarily restore canceled polices applied to association coverage, if states and insurers agreed. New York has no plans to do so.

Donna Frescatore, executive director of New York State of Health, the state insurance exchange, said that on a positive note, about half of those affected would qualify for subsidized insurance under the new health exchange because they had incomes under 400 percent of the poverty level, about $46,000 for an individual.

I still do not understand how anyone could consider it a "positive" that 50% of people who were previously self-reliant now become wards of the state.

Politicians frequently argue by anecdote.  I don't generally find this compelling -- after all, one can find an anecdote about just about anything among 300 million people.

But for those who do believe that an anecdote proves their case -- doesn't a reversal of fortune within that anecdote then disprove their case?  How can a particular person's experience be entirely generalizable, and then suddenly not be so when the facts change?

Back in October, Sanford had written a letter to the White House to share her good news. The 48-year-old single mother of a teenage son diagnosed with ADHD had just purchased what she considered to be affordable insurance on the Washington state exchange....

Her heartfelt letter made it to the President's hands and then into his October 21 speech.

"'I was crying the other day when I signed up. So much stress lifted.'" Obama said, reading from Sanford's letter.

The president said Sanford's story was proof, despite the technical problems with the healthcare.gov website, that the Affordable Care Act was working....

But then, after Obama mentioned her story, Sanford started having problems. Sanford said she received another letter informing her the Washington state health exchange had miscalculated her eligibility for a tax credit.

In other words, her monthly insurance bill had shot up from $198 a month (she had initially said $169 a month to the White House but she switched plans) to $280 a month for the same "gold" plan offered by the state exchange....

Last week, Sanford received another letter from the Washington state exchange, stating there had been another problem, a "system error" that resulted in some "applicants to qualify for higher than allowed health insurance premium tax credits."...

The result was a higher quote, which Sanford said was for $390 per month for a "silver" plan with a higher deductible. Still too expensive

A cheaper "bronze" plan, Sanford said, came in at $324 per month, but also with a high deductible - also not in her budget.

Then another letter from the state exchange with even worse news.

"Your household has been determined eligible for a Federal Tax Credit of $0.00 to help cover the cost of your monthly health insurance premium payments," the latest letter said.

Well, so much for the implicit gag order Obama has had on the insurance companies.  Bet we will find out a lot more interesting details about the exchange rollouts now.

[T]he White House has its own idea to stop the bleeding: Allow insurers to renew existing plans in 2014 (which means they could continue into 2015) while forcing them to send Landrieu-like letters explaining why their plans don’t conform to the Affordable Care Act’s standards.

This doesn’t really ensure anyone can actually keep their plan — which means it also doesn’t affect premiums in the exchanges. But it makes it easier for Democrats to blame insurers for canceling these plans. And it perhaps makes it easier for the White House to stop congressional Democrats from signing onto something like Landrieu or Udall.

The insurance industry is furious. They’ve been working with the White House to get HealthCare.Gov up and running and they’ve been devoting countless man hours to dealing with the problems and they’ve been taking the heat from their customers over canceled plans, and now the Obama administration wants to make them into a scapegoat.

“This doesn’t change anything other than force insurers to be the political flack jackets for the administration,” an insurance industry insider told Evan McMorris-Santoro. “So now, when we don’t offer these policies, the White House can say it’s the insurers doing this and not being flexible.”

This is like telling GE to reintroduce 100 watt lightbulbs on thirty days notice, and then blaming them if they don't do it.  Or as I tweeted earlier,

Obama telling insurers they can reinstate plans is like my wife telling me to take the exit we passed two miles ago @instapundit @mfcannon

— Coyoteblog (@Coyoteblog) November 14, 2013

 Update:  Left rallying around Obama, spreading the word that cancellations are all the insurance companies' fault.  I am SO glad I am not affiliated with a political party such that I would feel the need to embarrass myself to support some flailing politician on my team.

The Left has been calling cancelled policies "sub-standard" for months now.  For three years Obama's own folks were estimating that over half of individual policies would have to be cancelled due to the law, and in fact they purposely wrote the regulations narrower to invalidate the maximum number of policies.  But now cancellations are the insurance companies' fault??

Here is his new excuse for his "you can keep your health insurance" promise being broken.  It is -- wait for it, you will never guess -- insurance companies' fault.

"One of the things health reform was designed to do was to help not only the uninsured but also the under-insured," Obama said. "And there are a number of Americans, fewer than 5 percent of Americans, who've got cut-rate plans that don't offer real financial protection in the event of a serious illness or an accident.

"Remember, before the Affordable Care Act, these bad apple insurers had free rein every single year to limit the care that you received or used minor pre-existing conditions to jack up your premiums or bill you into bankruptcy."

This is absurd.   Kaiser Permanente cut zillions of policies.  Are they a bad apple?  My policy was cut by Blue Cross / Blue Shield of Arizona.  Are they some fly-by-night cut-rate insurer?

Via the Daily Caller:

The White House is pressuring insurance companies not to speak publicly about Obama administration policies that could eliminate the existing health insurance plans of millions of Americans.

The administration made “clarifications” to the 2010 Affordable Care Act after it was passed that have already wiped out hundreds of thousands of existing health plans.

“Basically, if you speak out, if you’re quoted, you’re going to get a call from the White House, pressure to be quiet,” said CNN investigative reporter Drew Griffin on Anderson Cooper 360 Wednesday night. Insurance companies executives, Griffin said, ask heads of consulting firms not to criticize the Obamacare rollout debacle publicly.

“They feel defenseless before the White House P.R. team,” Griffin said. “The sources said they fear White House retribution.”

Prior to the Obamacare rollout, insurance companies issued warnings to the White House about the possibility of mass cancellations, which the administration ignored.

As has become usual of late, Jay Carney channels Ron Ziegler with this absurd answer.  Apparently, the fact that insurance companies are still engaged in routine conversations with their customers proves they have not been silenced from publicly criticizing Obamacare.

White House press secretary Jay Carney, however, waved off the allegations.

“That accusation is preposterous and inaccurate,” Carney said. “Plus, it ignores the fact that every day, insurance companies are out talking about the law, in large part because they are trying to reach new customers who will now have new, affordable insurance options available from providers through the new marketplaces.”

So I guess the Left has hit on its favored meme in response to the millions of insurance cancellations.  From Obama to Valerie Jarrett to any number of bloggers, the explanation is that the cancelled policies were "sub-standard".  We may have thought we liked them, but it turns out we were wrong.  Deluded in fact.

These folks -- despite not knowing my income, my net worth, my health situation, my age, my family size, my number and age of kids, my risk adversity, my degree of hypochondria, my preventative care habits, my diet, my lifestyle, my personal preferences and priorities, or any details about my insurance policy that I spend many hours analyzing and cross-comparing -- have decided they know better than I what health insurance I should want.

My plan was not substandard.  I graduated magna cum laude in engineering from Princeton and was first in my class at Harvard Business School.  I spent hours shopping for my coverage and was fully satisfied with my resulting policy.  Many of the aspects of my policy that cause Obama to call it "sub-standard" -- lack of mental health care, lack of pediatric dental care, lack of maternity care, lack of free contraception, a higher than average deductible -- were my preferences.  I got what I wanted.

More expensive, more highly featured products are not necessarily "better".  A Mercedes is not necessarily the best car choice for a middle class buyer just because it has more features than his Taurus.  Would Obama tell that person his Taurus is "sub-standard" and force him to pay for a Mercedes? If not, why the hell is doing the exact same thing but with health insurance OK?

From his speech today, via Bryan Preston

When Obama came to that section of his speech when the line usually falls, he went with a new spin. If you’ve lost your healthcare thanks to his law, he wants you to know that you were just “under-insured.” Because he says so.

“One of the things health reform was designed to do was to help not only the uninsured but also the under-insured,” he said.

“If you had one of these substandard plans before the Affordable Care Act became law, and our really liked that plan, you are able to keep it. That’s what I said when I was running for office.”

“But ever since the law was passed, if insurers decided to cancel or downgrade these substandard plans, what we said, under the law, is you have got to replace them with quality, comprehensive coverage,” he said, “because, that, too, was a central premise of the Affordable Care Act from the very beginning.”

Update:  ugh

Update #2:  Yesterday I said the time seemed right for the Left to pick a meme to explain the insurance cancellations and then give the media its marching orders.  David Firestone of the NYT has gotten the memo

The so-called cancellation letters waved around at yesterday’s hearing were simply notices that policies would have to be upgraded or changed. Some of those old policies were so full of holes that they didn’t include hospitalization, or maternity care, or coverage of other serious conditions.

Republicans were apparently furious that government would dare intrude on an insurance company’s freedom to offer a terrible product to desperate people.

“Some people like to drive a Ford, not a Ferrari,” said Marsha Blackburn of Tennessee. “And some people like to drink out of a red Solo cup, not a crystal stem. You’re taking away their choice.”

Luckily, a comprehensive and affordable insurance policy is no longer a Ferrari; it is now a basic right. In the face of absurd comments and analogies like this one, Ms. Sebelius never lost her cool in three-and-a-half hours of testimony, perhaps because she knows that once the computer problems and the bellowing die down, the country will be far better off.

So you see the talking points as the media gets their orders.  1.  All policies that were cancelled were sub-standard.  2.  People will be better off with more expensive policies, even if they are too dumb to konw it.

My policy was perfectly fine.  I was not tricked.  I am willing to bet I am at least as smart as David Firestone.  I am positive I am smarter than Barrack Obama.  And yet my policy was cancelled.

Last year I predicted that the biggest economic story of 2013 would be the end of full-time work (due to Obamacare) in the retail service industry.  I seldom make predictions, but wrote that at the time because I was amazed that this shift to part time work was all we were talking about in the small business world, since for technical reasons in the law we had to have these changes in place in 2013, well before the 2014 start of the employer mandate.

The media world is finally catching up, particularly after recent jobs reports where the totality of net new job creation (and more) was in part time jobs.  Here is yet another story from the media finally noticing a business conversation that has been going on for almost a year:

Employers around the country, from fast-food franchises to colleges, have told NBC News that they will be cutting workers’ hours below 30 a week because they can’t afford to offer the health insurance mandated by the Affordable Care Act, also known as Obamacare.

“To tell somebody that you’ve got to decrease their hours because of a law passed in Washington is very frustrating to me,” said Loren Goodridge, who owns 21 Subway franchises, including a restaurant in Kennebunk. “I know the impact I’m having on some of my employees.”

Goodridge said he’s cutting the hours of 50 workers to no more than 29 a week so he won’t trigger the provision in the new health care law that requires employers to offer coverage to employees who work 30 hours or more per week. The provision takes effect in 16 months....

The White House dismisses such examples as "anecdotal." Jason Furman, chairman of the president’s Council of Economic Advisors, said, “We are seeing no systematic evidence that the Affordable Care Act is having an adverse impact on job growth or the number of hours employees are working. … [S]ince the ACA became law, nearly 90 percent of the gain in employment has been in full-time positions.”

But the president of an influential union that supports Obamacare said the White House is wrong.

"It IS happening," insisted Joseph Hansen, president of the United Food and Commercial Workers union, which has 1.2 million members.  "Wait a year. You'll see tremendous impact as workers have their hours reduced and their incomes reduced. The facts are already starting to show up. Their statistics, I think, are a little behind the time."

This has to be spin by the Obama Administration and not an honest belief.  There is no way they could have missed this:

In June, the household survey reported that part-time jobs soared by 360,000 to 28,059,000 – an all time record high. Full time jobs? Down 240,000.  And looking back at the entire year, so far in 2013, just 130K Full-Time Jobs have been added, offset by a whopping 557K Part-Time jobs.

I have written before that I think these changes are here to stay.  In some cases it is actually easier for businesses to stitch together full service coverage from part-time workers, as I discussed in this article at Forbes.

This story has pretty much shifted from "I predict" to "I told you so" to "duh."  But everyone from Karl Rove to the Teamsters now recognize that Obamacare is on a path to destroying full-time employment in the retail service sector.  Via the WSJ, in an editorial by Rove:

These union heads charged that unless Mr. Obama enacts "an equitable fix," the Affordable Care Act "will shatter not only our hard-earned health benefits, but destroy the foundation of the 40-hour work week."...

Union leaders are correct that ObamaCare "creates an incentive to keep employees' work hours below 30 hours a week." After all, employers can avoid a $2,000-per-worker fine if they don't provide insurance as long as employees work fewer than 30 hours a week. Union leaders have realized—too late—that ObamaCare will affect the livelihood of millions of workers who wait tables, wash dishes, clean hotels, man registers, stock shelves and perform other tasks that can be limited to shifts of less than 30 hours a week. The White House take on this concern? Press Secretary Jay Carney said it "is belied by the facts."

But the data from the Bureau of Labor Statistics show that, in 2010, the year ObamaCare passed, full-time employment grew at an average monthly rate of 114,000 while part-time employment dropped an average of 6,000 a month. So far this year, as ObamaCare is being implemented, full-time employment has grown at an average monthly rate of 21,700 while part-time employment has increased an average of 93,000 a month.

Via ABC

The Internal Revenue Service official in charge of the tax-exempt organizations at the time when the unit targeted tea party groups now runs the IRS office responsible for the health care legislation.

Sarah Hall Ingram served as commissioner of the office responsible for tax-exempt organizations between 2009 and 2012. But Ingram has since left that part of the IRS and is now the director of the IRS’ Affordable Care Act office, the IRS confirmed to ABC News today.

What Obama most needed in the IRS ACA office was someone willing to ignore the clear language of the PPACA legislation and ram through IRS tax subsidies for insurance policies in the Federal (vs. state) exchanges -- subsidies that were purposefully and explicitly denied in the plain language of the law.

From the file of things that are absolutely obvious to business owners, and a total shocker to the pundit and policy class:

In its latest monthly report on economic conditions across the country, the Federal Reserve points to Obamacare as one reason the unemployment rate has remained near or above 8 percent under the current administration.

That’s what Sally Pipes, president of the Pacific Research Institute, writes in an op-ed piece for Forbes magazine.

The Fed’s so-called “beige book” noted that employers across the country have “cited the unknown effects of the Affordable Care Act as reasons for planned layoffs and reluctance to hire more staff,” Pipes says, adding that as more businesses learn about Obamacare, “the more they’re coming to realize that affordable care” is the last thing it will provide.

Here is my attempt to illustrate the same thing in one chart (net monthly job creation, which Kevin Drum helpfully posts each month):

I will revise this chart later - this is actually public and private totals.  When you look at private only, the April 2010 peak goes away (that was temporary census hiring) and the chart has an even more stark inflection right there in March 2010 when Obamacare was passed.

The Wall Street Journal editorial page had a piece on the "smearing" of small business.  Apparently, in the political battle over Obamacare, the NFIB has become the new target of the left.

I have not seen these attacks on the NFIB, but after the bizarre joint attacks on ALEC, I certainly believe they exist.  The WSJ summarizes these attacks this way:

According to the smear campaign against the National Federation of Independent Business, or NFIB, small businesses are thrilled with the Affordable Care Act and the trade group betrayed the 300,000 companies it represents. Among the dozens of media outlets publishing anti-NFIB op-eds disguised as reporting, Reuters recently asked in a headline, "Who truly speaks for small businesses?" The question mark was superfluous.

The chairmen of the House Progressive Caucus, Democrats Raul Grijalva and Keith Ellison, chimed in with a letter accusing the NFIB of acting against "the best interest of small business owners" and "the popular opinion of the American small business community." They suggest Karl Rove is behind the suit, as he is everything else.

As a member of the NFIB  (I joined several years ago specifically due to their work on health care) I believe the NFIB addresses issues that really concern our company better than any other group I have found.  Certainly they are far better than the Chamber of Commerce, which tends to be a group of large companies more interested in crony handouts than free competition.  Members get polled constantly to see what issues we care about and to see what positions we would like the NFIB to take.

This latter process makes the NFIB among the most virtuous of the organizations to which I have belonged.  Certainly the Sierra Club, way back when I was a member, never polled me on whether I preferred them to focus their efforts, say, on political activism or true conservation efforts.

I am exhausted by journalists and politicians on the Left who have barely even worked in a profit-making venture, much less run one, who speak with great authority on what small business owners should or should not want.  Our company is in the business of making long-term operations bids.  For the last three years, we have had to bid two numbers for our expenses, one with Obamacare and (a much lower one) without.  Never in 25 years of our history has any external factor, government-drive or not, made this much contingent difference to our bids.  So it is simply insulting to be told that it should not make any difference to me, or that its effects will be universally cost-reducing.

Further, it is really, really hard for a small business to parse the impact of Obamacare because it is #$&*#$ hard to figure out just what its provisions are.  McDonalds can afford to hire a team of experts to figure it out, and to start gaming it by using its political clout to seek special exemptions and treatment from the Obama Administration.  We cannot.  The NFIB is the only organization, public or private, in the country that has actually helped us understand the law's requirements.  For several years running, they have sent an expert, at their expense, to our industry gatherings to help educate companies on the law.

Kevin Drum quotes favorably from Chad Terhune at the LA Times

Some insurers are chasing after much smaller customers with new plans designed to limit employer payouts for big claims using what's called stop-loss policies. This guarantees that businesses won't be responsible for anything over a certain amount per employee, perhaps as low as $10,000 or $20,000, with the rest paid by an insurer. Regulators and health-policy experts say this arrangement undercuts the notion of self-insurance since employers aren't bearing much of the risk, and it allows companies to circumvent some state insurance rules.

"This is not real self-insurance. This is clearly a sham," said Mark Hall, a professor of law and public health at Wake Forest University who has studied the small-business insurance market. "Regulators have good reason to be concerned about the potential harm to the market."

Self-insurance is attractive for many reasons, particularly the prospect of lower costs. It's exempt from state insurance regulations such as mandated benefits, granting employers the flexibility to design their own benefit package and the opportunity to reap some of the savings from employee wellness programs. A federal law, the Employee Retirement Income Security Act, or ERISA, governs self-funded plans. Some aspects of the Affordable Care Act do apply to self-insurance, such as the elimination of caps on lifetime benefits and some preventive care at no cost.

Drum agrees

Yeah, it's a scam.

In a reasonably sane world, and in all other contexts outside of health care, insurance is obtained at relatively low prices to cover only catastrophic events that would be potentially bankrupting.  Car insurance does not cover oil changes and home insurance does not cover oven repairs.  So why is it that Drum is arguing that we should ban insurance policies that only cover catastrophic losses and not routine costs?   After all, the second sentence in the first paragraph from the LA Times sure seems to define exactly what insurance should be (and is similar to my personal policy, which has a high deductible attached to a health savings account).

The problem is that when Drum and the Left use the word "health insurance" they are actually referring to a bundle of four items

• Traditional catastrophic insurance against large, unexpected, bankrupting charges
• Third party payment / capitation for entirely routine and expected health expenditures, from physicals to contraception
• Crony payoffs for favored constituencies, mainly via mandated benefits rules.  This payoff may be to consumers, e.g. young women like Sandra Fluke who have the rest of us pay to maintain her sex life; or it may be to corporate cronies, who are able to get their particular device or procedure or service included in the mandated benefits, guaranteeing a large stream of customers who don't care a bit what the product or service costs because it is now paid for by a third party.
• Social engineering, in the form of embedded incentives to promote certain favored behaviors like seeking preventative care or eating better.  And when the government is paying the bill, the policy becomes a Trojon horse for government micro-management of our lives in the name of health cost reduction.

The second item seems to be a paradigm embedded in the mind of everyone in the US today, that health plans somehow need to cover every imaginable health-related expense.  Outside of an HMO model where these expenses are managed, this is a recipe for a cost explosion.  If we all had pre-paid car policies that bought our cars for us with low deductibles, no one would be driving a seven-year-old Nova.  The third and fourth items are Trojan horses for state control and cronyism that politicians are desperate to preserve.   So it is not surprising that efforts to roll back insurance to just be, well, insurance is met with anger by would-be authoritarians.  The question is, why do we listen to them?