In our Oct 12th post, Obamacare is Working as Planned, we pointed out that the President’s objective is the elimination of private insurance altogether. We included a video of Barack Obama declaring very clearly that single player is the goal. Single means “only” and the “only payer” is of course the federal government. The complete elimination of private health insurance companies is his goal.
One thing the President knows about economics is that he can destroy an industry by raising its costs and taking away its customers. It’s called the double whammy. The Associated Press issued this progress report:
AP WASHINGTON – Oct 24, 2010
The new health care law wasn’t supposed to undercut employer plans that have provided most people in the U.S. with coverage for generations.
But last week a leading manufacturer told workers their costs will jump partly because of the law. Also, a Democratic governor laid out a scheme for employers to get out of health care by shifting workers into taxpayer-subsidized insurance markets that open in 2014.
While it’s too early to proclaim the demise of job-based coverage, corporate number crunchers are looking at options that could lead to major changes.
“The economics of dropping existing coverage is about to become very attractive to many employers, both public and private,” said Gov. Phil Bredesen, D-Tenn.
You must forgive the Associated Press for saying “it wasn’t supposed to”. The AP editors don’t read Random Thots and thus are not fully informed. McDonalds and AT&T were first to say, that due to the new law, they would need to drop or seriously curtail health insurance for employees in order to remain viable and competitive. Senator Waxman threatened to haul the executives into Washington for an investigative hearing by the Senator’s committee. Ultimately a deal was cut and these two companies have exemption from the law.
What’s next? If two are exempted, why not two hundred? or two thousand? That will never do, so more exemptions are unlikely. That means employers will drop the insurance, pay the additional tax (called a “fine” for legal reasons) and health care coverage will default to the government. No major company wants to go next. But one will, and then an avalanche will follow.
In his promise to the labor union membership, Obama said “It won’t happen overnight. It may take 10 years or more.” It looks like the plan is running ahead of schedule.
RANDOM THOTS 