Sunday, October 10, 2010

Throughout the debate over health care, the Obama administration assured Americans repeatedly that Obamacare would not interfere with their current health insurance. A little over six months after the government health care takeover became law, that false promise is already falling apart. If not for a last-minute intervention, thousands of workers were on the verge of losing their coverage due to expensive new mandates.

Obamacare's Broken Promises
By Congressman Tom Cole

Just days ago, the Department of Health and Human Services announced waivers for 30 companies, exempting them from complying with the law. The announcement came on the heels of reports that McDonald's was considering dropping coverage for 30,000 employees due to costly new regulations governing annual limit restrictions. Under Obamacare, companies are required to raise the minimum annual benefit of their employee health plans to at least $750,000 this year.

Forced to choose between bearing unsustainable costs or canceling health coverage, dozens of companies like McDonald's, Aetna and CIGNA applied for waivers. The Obama administration granted all but one request, tacitly acknowledging that the nearly one million people employed by the 30 companies would not be able to keep their coverage under Obamacare after all.

However, the waivers only last one year, and the annual minimum limits are scheduled to rise to $1.25 million in 2011 and $2 million in 2012. With the mandates growing more costly each year, we can expect more and more companies to be forced to consider dropping coverage unless Obamacare is repealed.

As costly as it is to provide coverage under the new regulations, penalties for not offering benefits the administration deems satisfactory are also hurting businesses. Numerous news accounts confirm recent findings by the nonpartisan Congressional Budget Office that penalties enforced against employers who can't afford to comply with insurance mandates will cause businesses to cut hours and jobs This is particularly true for small businesses and companies that employ low-income workers.

The family-owned White Castle hamburger chain covers 70 to 89 percent of the premium costs of its full-time employees but could still be fined $3,000 per worker under a provision that penalizes companies whose employees pay more than 9.5 percent of household income in premiums. This one provision is expected to consume over half of White Castle's profits by 2014. For International House of Pancakes franchise owner George Ebinger, penalties for not insuring his 140 employees are expected to be about $220,000. Under Obamacare regulations, however, providing insurance would cost twice that much. As Ebinger put it, "Ultimately, either businesses will close or consumers will pay more."

With a 9.6 percent unemployment rate, we can't afford mandates that force employers to cut jobs. Obamacare must be repealed and replaced before more damage is done.

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