As we get closer to full implementation of Obamacare in 2014 corporations
such as Wal-Mart are figuring out ways of avoiding healthcare insurance
coverage for their employees.
Darden Restaurants, owner of Olive Garden and Red Lobster,
and a New York-area Applebee’s franchise owner has
announced that they will limit hours worked to under the thirty hours a week
threshhold. They will simply hire more employees who will work less than thirty
hours a week.
mean that those workers will be forced to work two jobs if they can. With the
unemployment rates remaining high this might be difficult.
these people might not be eligible for Medicaid coverage under Obamacare.
definition of eligibility depends on the state rules. HHS just announced rules
for Medicaid expansion. The goal of these “Medicaid Expansion Rules” is to
force states to participate in the expansion of Medicaid.
States must increase Medicaid eligibility to 133% of the poverty level in
order to receive 100% of
the matching federal funds made available under Obamacare. A state will receive mating funds from January
1,2014- January 1,2017.
January 1,2017 the states are on their own. The increase in enrollees will
become a huge burden.
President Obama is counting on the states to
assume the cost of Medicaid as he has the CBO calculate his fictitious scoring
on the cost of Obamacare.
133% Federal Poverty Level for one person means an annual income of $14,856.
For a family of four it means $30,657.
Many states have poverty levels above the nationally defined levels. In Indiana
the eligibility level for Medicaid is an annual income below $63,000 for a
family of four.
restaurant owner and caterer, in the smallish town of McKinney Texas, employs
55 people full time. He told me he is
going to have to fire 6 people in order to avoid the Obamacare rule. He must
also reduce hours worked to below 30 hours per week.
also contract his business rather than expand it. He cannot afford the $110,000 Obamacare penalty.
It plans to begin denying
health insurance to newly hired employees who work fewer than 30 hours a week
starting January 1st 2013 to avoid the Obamacare penalty for not
providing healthcare coverage for employees.
a senior consultant at Towers Watson said,
”Some of his clients were planning to track workers’ hours
more carefully. “I expect health plans like Walmart’s won’t be uncommon as
firms adjust to this law.”
Wal-Mart’s decision to exclude
workers from its healthcare plans is an attempt to limit costs while taking
advantage of Obamacare. Obamacare is
going to have to expand Medicaid coverage well beyond 31 million people.
Many of Wal-Mart’s employees would qualify for the expanded
Wal-Mart would rather pay the $3,500 penalty than pay $12,000 to
$18,000 dollars a year healthcare insurance premium for their employees.
“Walmart is effectively
shifting the costs of paying for its employees onto the federal government with
this new plan, which is one of the problems with the way the law is
structured,” said Ken Jacobs, chairman of the Labor Research Center at the
University of California, Berkeley.
“Medicaid Expansion” is a big joke. The uninsured workers will increase
from 31 million to some higher number when companies drop healthcare insurance
coverage and pay the penalty.
At present before “Medicaid Expansion” the entire Medicaid program is
unaffordable. Medicaid cost will now escalate. President Obama will not be able
to afford to keep his promise to the poor.
States realized President Obama has set them up to get stuck with the
increased Medicaid cost. States are not signing up for the “Medicaid Expansion“
even though they would like the matching federal funds.
The nation’s governors were told,
“States that don't expand
their Medicaid rolls to include residents at 133% of the federal poverty level
won't get 100% of the matching federal funds made available under the Patient
Protection and Affordable Care Act (Obamacare).
The unintended consequence of large employers and corporations not
covering their employees with healthcare insurance is escalating.
Who is going to qualify for Medicaid? Who will get stuck being uninsured?
The poor people earning an annual income of less than 133% Federal
Poverty Level will qualify for Medicaid coverage.
Anyone earning a penny more than the Federal Poverty Level will be rejected
and not qualify to receive Medicaid coverage.
The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.