The Very Expensive "Affordable Care Act"

An “affordable” or “low cost” healthcare system? The difference is tenuous. And yet, if the American secretary of health and human services has repeated on multiple occasions that the additional cost incurred by “Obamacare” would be negligible to the economy, the implementation of its different policies may present higher expenses than anticipated for certain taxpayers. The requirement made for every American to equip themselves with healthcare coverage by 2014 poses a particular problem.

Employers Held by the Throat

The law handsomely named the “Affordable Care Act” is considered too costly for a number of American employers that are increasingly declaring themselves incapable of providing healthcare coverage for their employees, a requirement laid out by the flagship law from Obama’s first term.

The main targets of this new policy? Employers of low-cost labor — typically, of fast food chains and supermarkets. These employers partly fear the high cost of the existing insurance policies linked to an extension of awarded benefits, and they partly fear the new requirement imposed upon them to cover all of their employees who work a certain number of hours.

For some, as highlighted by the Financial Times on Monday Feb. 18, paying a fine has shown itself to be more worthwhile than submitting to the law. The penalty, fixed at $2,000 dollars per employee, a lot lower than the cost of a corporate insurance policy per employee, is considered to be too low to be dissuasive.

Interested Groups Ready to Turn Away from the Law

The trade unions, which previously pleaded for the Affordable Care Act, and are showing themselves to be more reluctant at the moment of implementation, denounced the conservative Dean Clancy on the front page of the Washington Post. The AFL-CIO, followed by several thousands of other trade unions, has forced the hand of the government to exempt them from the policy. Clancy argues that this powerful work of lobbying is a result of “how unlimited government power breeds corruption.”

Individuals and the Diversity of Household Incomes

Finally, the consumer associations have sounded an alarm bell. Several of them have put forward evidence that thousands of dollars need to be paid to employers by uninsured American families to secure an insurance policy. “Public subsidies will cover some things, but they won’t be enough,” predicted the Kaiser Family Foundation at the end of 2012.*

However, the law has foreseen some necessary adjustments. If the cost of an insurance policy is higher than 8 percent of an individual’s income, then the individual is exempt from the requirement of securing one. And the penalty for individuals who refuse to secure a policy cannot pass $695 dollars, or 2.5 percent of their income. All of the governmental financial aid for securing an insurance policy will be based on individual household incomes — the highest aid being awarded to the poorest households. But for the middle class, insuring themselves will amount to a considerable expense in each family’s budget: $7,195 dollars per year for a family of four with an annual income of $75,000 dollars, according to Kaiser Foundation calculations.

In Washington, the government has quickly swept away the criticisms, promising to revise the policy if it proves to be necessary and, especially, recalling that the Republicans themselves have “no solution.”

*Editor’s Note: This quote, while translated accurately, could not be verified in English.