I'm sure as the details of the god-awful budget deal emerges, we'll be hearing more stuff like this. The Wall Street Journal reports:
The budget deal reached Friday would affect two initiatives contained in last year's health-care law that were bitterly opposed by businesses, killing one outright and slashing funding for the other.
The agreement would eliminate a provision of the health-care law enabling low-income workers to opt out of employer-offered health insurance and shop for more affordable coverage on insurance exchanges to be created in 2014, according to congressional aides and business groups.
Under the provision, employers would have had to help pay for the insurance purchased on the exchange. Ending the program would save the government $4 billion over 10 years, but it wouldn't result in any immediate spending cuts because it isn't set to begin for three years.
The Free Choice Voucher is pretty simple to understand:
Even when an employer offers adequate coverage, certain employees can still access coverage through the exchanges if they choose. These are workers who receive “free choice vouchers” from their employers. Employers are required to offer free choice vouchers to workers who earn less than 400% of the federal poverty level and whose contribution to the employer’s coverage plan would fall in a certain range. If the employee would be required to pay between 8 and 9.8 percent
of his or her household income for the employer-sponsored coverage, the employer must offer the worker a free choice voucher.
A worker who is offered a voucher can either participate in the employer plan or use the voucher to purchase coverage through an exchange. The voucher, in effect, allows the employee to take the employer’s contribution toward coverage and use it for a potentially more affordable exchange plan. The amount of the voucher is equal to the employer’s share of the premium in the employer plan — if multiple plans are offered, the most generous employer contribution sets the amount of the voucher. The employer must provide its share of self-only or dependent coverage at the worker’s choice. If the amount of the voucher exceeds the cost of the premium for the plan the worker buys through the exchange, the excess is to be paid to the employee.
One of the actually positive nuggets in the ACA. Gone. Business strongly opposed this provision as it would have the effect of making them pay what they would offer their high income workers to their employees who would naturally have to decline the high premiums and co-pays of the employer negotiated plans. That is why low income workers generally turn down healthcare offered by employers. The premium deductions would eat deeply into their already low paychecks. This provision, sponsored by Wyden, would require the employer just take that offered coverage amount to the exchange, where the worker could then use the employer funds to purchase a cheaper plan and pocket the difference, if any.
You can clearly see why an employer would be aghast at this. The reason they offer high cost plans to low wage workers is because they know the workers will opt out because of the cost. That way, they don't have to spend the money on covering them. "Hey...YOU are the one that opted out, buddy!" By the way, this provision only applies to large employers, not small businesses. And only to workers at 400% of poverty level and below, which comes to about $88,000 for a family of four and about $43,320 for individuals.
Well, sorry retail workers of America. That's gone. You either go with the expensive employer's plan or you face the mandate tax for not having healthcare. Awesome. And keep in mind, we are talking about PRIVATE DOLLARS here. Nothing in this provision costs the government a single dime, excepting administrative costs. Nothing to do with the deficit. Nothing to do with government spending of any sort. It doesn't even take effect until 2014.
Sen. Ron Wyden, who sponsored this provision, had this to say:
Recently the Kaiser Family Foundation reported that while premiums had increased an average of 3 percent last year, the typical employer had shifted an additional 14 percent of the cost onto workers. With workers facing higher health costs combined with stagnant wages, more and more workers will face that Hobson's choice of unaffordable employer sponsored insurance or going without health care.
But last night, after weeks of closed-door negotiations to keep the federal government open, Free Choice Vouchers were placed on the chopping block even though there is no budget savings from cutting them this year.
I'll leave you to speculate how they got there.
No need to speculate. The Business Roundtable, the U.S. Chamber of Commerce, and the National Association of Manufacturers pushed for it. The other thing the bill cut was 50% of the funding for Kent Conrad's silly healthcare co-ops, but it goes back next year at full funding.
So, in sum, a provision that had nothing to do with the budget, nothing to do with the deficit, and cost the federal government not a single dime excepting administrative costs, was eliminated whole cloth. Mainly because it would force large employers to offer their middle and low income workers a voucher to use to buy cheaper coverage than the employer was offering.
We weren't just taken to the cleaners. We got our lunch eaten and we got dunked on with balls on our forehead.