CNBC Notes Yet Another Obamacare 'Quirk': Many Employees Will Turn Down Employer Coverage and Head to the Exchanges

Maybe we should cue up the old classic "High Hopes," especially given its ironic title, every time one of these "unintended consequence of Obamacare" stories comes along. Instead of singing "Oops, there goes another rubber tree plant," we can all sing, "Oops, there goes another Obamacare 'quirk.'"

One of the latest "quirks," also described as a "weird" result of the progressive movement's March 2010 legislative handiwork gleefully signed by President Obama, arrived via CNBC Health Care Reporter Dan Mangan on Tuesday. As predicted by many center-right analysts several years ago, it will make financial sense for quite a few employees to turn down their employers' health care coverage and move to the subsidized, government-run Obamacare exchanges. If enough employees start doing that — given the financial consequences, thousands if not millions will — many employers will have even more incentive than they already have to jettison their plans completely. Imagine that (bolds are mine):


Obamacare penalty: Your family could pay more for insurance

Just imagine saying this to your boss: "Don't offer me health insurance benefits."

Those apparently bizarre words might actually end up being uttered next year because of a quirk in Obamacare that could financially penalize a number of workers and their families.

That quirk means that for some people, it will be more economical to have an employer not offer health insurance subsidies for them and their families—and for the entire family to then instead be able to buy insurance with government subsidies on the Obamacare state health exchanges.

"For a lot of people, that may be a better deal," said Jonathan Wu, co-founder of the price-comparison site ValuePenguin.com. "We're talking like thousands of dollars."

Wu noted that companies might be able to shed health-care costs as a result of the quirk, too.

"Our analysis suggests that employees and employers across the country should sit down and discuss the potential merits of discontinuing employer-sponsored plans," ValuePenguin.com said in a new report. "The company would end up saving money while the employee would benefit from thousands of dollars in tax subsidies—a clear win-win for both parties."

Absolutely no one saw this coming ... oh, wait.

In March 2010, the Congressional Budget Office estimated that 11 million employees would see their employers drop coverage for a variety of Obamacare-related reasons, including the scenarios described by Mangan. The Center for Medicare and Medicare Services pegged the drop at 14 million that April. Shortly thereafter, the Lewin Group and American Action Forum estimated that employers would drop 17.2 million 35 million Americans, respectively, from their plans.

Really, even without the analysis, anyone with a pulse had to know that financially strapped employers would be tempted to walk away from health care coverage once the exchanges came into being, and that many employees who compared the cost of their employer coverage to the net cost after subsidies at the exchanges would tell their employers "never mind" to company-provided healthcare coverage. The objective of Obamacare is and always has been, as Harry Reid acknowledged a bit less than two weeks ago, to serve as an intermediate stop on the way to a no-turing-back, single-payer system.

As has usually been the case with establishment media reports, CNBC's Mangan didn't run this latest "quirk" against Barack Obama's core promise to the American people made repeatedly during 2009:

We will keep this promise to the American people. If you like your doctor, you'll be able to keep your doctor. Period. If you like your health care plan, you'll be able to keep your health care plan. Period. ...

Obama's statement is best seen in the context of another statement he made in the energy area. In January 2008, he made a statement to reporters and editors at the San Francisco Chronicle which the paper virtually hid from view until an enterprising blogger found it just days before Election Day that year. It concerned the impact of his proposed cap-and-trade legislation. Obama said:

So if somebody wants to build a coal-powered plant, they can; it’s just that it will bankrupt them because they’re going to be charged a huge sum for all that greenhouse gas that’s being emitted.

Similarly, if the people affected by the "quirk" CNBC's Mangan has cited want to keep their current employer-provided health plan, they can, or "will be able to" — if they're willing to see their standard of living drop like a rock just to keep themsleves and their families covered at their company (one example Mangan cites has an impact of almost $6,500 per year).

And if the employer decides to drop coverage? Well, according to Barack-illogic, that's a decision the mean old employer made. That's not Obamacare's fault.

As the folks at Twitchy have noted, CNBC's original headline was "Obamacare Quirk: Your Insurance Could Go Up." Their reaction:

Oh, lapdogs! Obama-cheerleading journos are at it again! Forced to pay a lot more for insurance due to Obamacare? That’s totally just a “quirk” and stuff.

I guess the original headline was just too embarrassing to the administration for CNBC to allow it to stand.

Cross-posted at BizzyBlog.com.

Tom Blumer
Tom Blumer
Tom Blumer is a contributing editor for NewsBusters.