A key provision of Obamacare that was intended to help finance much of the health care law will likely “never go into effect,” President’ Obama’s former White House press secretary Robert Gibbs predicted Wednesday.
Speaking at the annual Benefits Selling Expo in Colorado, Gibbs said he expects the employer mandate to be repealed and said doing so would “improve the law,” BenefitsPro reported.
The employer mandate, which was delayed for a second time in February, requires employers with more than 50 full-time workers to offer their employees health coverage or be subject to a penalty by 2015 for companies with more than 100 workers, and 2016 for businesses with between 50 and 99 employees.
Gibbs said the employer mandate provision is “a small part of the law. I think it will be one of the first things to go.”
The president’s former press secretary’s comments are out of step with his fellow White House colleague—Dr. Ezekiel Emanuel, who favors the employer mandate and believes it will remain a fixture of the health care law and have a significant impact on how Americans receive health coverage in the future.
Emanuel, who served as a top adviser to President Obama and chief architect of the Affordable Care Act, told The New York Times that he predicts the employer mandate will prompt more large employers to shift their employees onto the federal and state exchanges. He said by 2025, “fewer than 20 percent of workers in the private sector will receive traditional employer-sponsored health insurance.”
When the mandate fully takes effect in 2016, Emanuel predicts that a handful of big “blue-chip companies will announce their intention to stop providing health insurance. Instead, they will raise salaries substantially or offer large, defined contributions to their workers. Then the floodgates will open.”
However, Gibbs, and many other opponents of the employer mandate, disagree and point out that many large employers already offer health coverage to their employees without the mandate.
A recently released Gallup poll shows about 44 percent of Americans receive health coverage through their employer. Other studies show that more than 170 million employees, retirees and dependents are insured through employers.
The mandate has received criticism on both sides of the aisle. Liberal blogger Ezra Klein called the provision “one of the worst ideas in recent memory” in The Washington Post.
“By tying the penalties to how many full-time workers an employer has, and how many of them qualify for subsidies, the mandate gives employers a reason to have fewer full-time workers, and fewer low-income workers,” Klein wrote.
He cited a 2009 analysis from the Center for Budget and Policy Priories which concluded that the employer mandate would “provide an incentive for employers to convert full-time workers to part-time workers,” among other issues.
Likewise, Avik Roy of the Conservative Manhattan Institute, called for repealing the mandate, calling it a “huge drag on hiring” in Forbes. “The mandate increases the cost of hiring someone, become on top of wages you now have to pay for his costly, government-approved insurance plan,” he explained.
However, if the employer mandate was repealed, it is unclear how the government would make up the money it is intending to collect from penalties in order to pay for the ACA.
“The penalties charged to employers that don’t offer affordable coverage are a key source of financing for the law,” Larry Levitt of the Kaiser Family Foundation said. “Repealing the employer requirement would lead to lower federal revenues, higher federal costs for premium subsidies and Medicaid, and probably more people uninsured.”
Gibbs said that the law is only in the “first inning” of its implementation, and should be improved upon down the road. “We need to have an honest discussion about improving and tweaking the law,” he said. “It will be a long time before we know how this will play out. But the law has real potential to work.”
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