Poor workers may find Affordable Care unaffordable

It’s called the Affordable Care Act, but another wrinkle in President Barack Obama’s healthcare law may make insurance unaffordable for many low-wage workers.

The law is complicated, but essentially companies with 50 or more full-time workers are required to offer coverage that meets certain basic standards and costs no more than 9.5 percent of an employee’s income. Failure to do so means fines for the employer. But do the math from the worker’s side: For an employee making $21,000 a year, 9.5 percent of their income could mean annual premiums of $1,995, and the insurance would still be defined as “affordable.”

Daniel Kessler, a Stanford professor of business and law, predicted single adults age 21-29 earning $34,000 to $46,000 will be hit with an increase of 46 percent, even after premium assistance from tax credits. Many are expected to remain uninsured, possibly risking fines. That’s due to another provision: The law says workers with an offer of “affordable” workplace coverage aren’t entitled to new tax credits for private insurance.

Another stipulation of the law may also be costly to workers: The law defines full-time work as 30 or more hours a week, on average, so many retail stores, hotels, and chain restaurants are reducing employees’ hours to avoid having to provide insurance or pay fines. For example, a North Carolina State student told WORLD this morning that a Raleigh IHOP has cut its employees’ hours to below the 30-hour insurance threshold.

President Obama said in a Chicago appearance last summer during the presidential campaign, “Let’s make sure that everybody who is out there working hard and doing the right thing, that they’re not going to go bankrupt because they get sick, that they’re going to have health care they can count on. And we got that done."

Some supporters of the law are disappointed to fall into what appear to be Catch-22 insurance rules. “Some people may not gain the benefit of affordable employer coverage,” acknowledged Ron Pollack, president of Families USA, a liberal advocacy group leading efforts to get uninsured people signed up for coverage next year: “The new law is a big step in the right direction, but it is not perfect, and it will require future improvements.”

As problems in the Affordable Care Act become more evident, the likelihood of the law remaining as is declines. The left will push for a single-payer system like Britain’s National Health Service. Conservatives will emphasize the potential of personal medical savings accounts.

Read more of WORLD’s coverage of the healthcare mandate.

The Associated Press contributed to this story.