The Law of Unintended Consequences
While I have always believed our health care reform system was a mess and needed fixing, I was never convinced the Affordable Care Act was the best way to do it. And a friendly exchange between me and IUPUI Professor Sheila Kennedy has reinforced that belief.
In a recent post on her blog, Kennedy laments that we romanticize about our nation’s “Norman Rockwell” roots, while employers make moves to deny their part-time employees access to health care coverage.
Under the ACA, an employer must provide health care coverage to any employee working more than 30 hours a week. In the IU system where Kennedy teaches, graduate assistants’ hours are being kept at 29 hours a week. IU is not alone. There are a number of colleges and universities, and school districts, across the country that are limiting hours for part-time employees so they don’t cross the 30-hour mark. At my part-time employer, Ivy Tech, adjunct faculty are being limited to no more than 9 hours per semester until the school can figure out how to compute hours and determine who reaches the 30-hour a week mark and who doesn’t.
** PROTECT YOURSELF FROM ID THEFT **
Kennedy argues that by limiting the hours of part-time employees, these employers aren’t living up to the “Rockwell” image we have of ourselves. I think what Kennedy fails to acknowledge, either by choice or by design, is that someone will have to pay for the health care costs, and she doesn’t say where the money will come from. Allow me to fill in that gap. When an employer’s costs go up, they have three options: raise prices, cut staff or take smaller profits. And seeing how these are schools, colleges and universities, option number three is not an option at all.
So does Kennedy recommend colleges and universities raise tuition to cover these new costs? Does she suggest some employees get fired so that others can have health care? She does advocate, “cutting the bloated administrative structure” to help pay for health care. I doubt you’ll get much savings from that. Now to her credit, Kennedy said she would be willing to take a pay cut so that someone else could have health insurance. Did you get that IUPUI?
The problem with Kennedy’s argument, as with most supporters of the ACA, is that it perpetuates the system where an individual gets his or her insurance from their job. I have always maintained that health insurance should be treated the same way we treat car and life insurance. You buy the policy and your employer stays out of it. People become much better consumers of products when they are directly responsible for the costs and you will find prices tend to come down when the third party subsidy goes away.
There is some good in the ACA, particularly the provisions that deal with pre-existing conditions, however mandating employers provide health coverage to part-time employees is taking a bad idea and making it worse. This is something Kennedy should ponder as she goes to her bosses and asks for that salary reduction so that someone else can have health care.
