Democrats Abandoning Obamacare's Employer Mandate

Sunday, 06 Jul 2014 09:42 AM

By Sandy Fitzgerald

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The Obamacare employer mandate has become a political quagmire for many liberals, who are starting to agree that penalizing business for refusing to offer health insurance is a part of the president's healthcare reform plan that should be abandoned.

"The issue really becomes, 'Do we need it or do we not need it?'" health policy expert Chris Jennings told Politico, saying the issue had become a "political irritant."

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Jennings, who helped the Obama administration during its final implementation push, isn't taking a stance over whether the mandate should stay or be replaced with another Democratic plan. However, he acknowledges that the mandate is "complicated to enforce; it is somewhat burdensome to some employers. But it does contribute to the underlying financing of the law."

As recently as April, when former White House Press Secretary Robert Gibbs and former Secretary of State Hillary Clinton both questioned whether the mandate would survive, Democrats were quick to say they did not agree with the two former Obama administration stalwarts.

But moving ahead just a few months later, experts are starting to agree with Gibbs and Clinton and say the mandate could do more harm than good for Obamacare.

Even the White House has labeled the mandate as "not critical," when delaying it twice in the past year, and now plans to slowly phase in the mandate, which states that businesses that have more than 50 full-time workers must offer them affordable insurance.

But the rule has helped lead to the nation's objections to Obamacare, especially after businesses reported cutting jobs or hours to avoid the costs of providing insurance for their workers.

And according to reports such as a recent study by National Center for Policy Analysis Senior Fellow Devon Herrick, the costs to provide insurance will hurt small business' hiring, employee compensation, and business growth, and the still-healing economy can't afford Obamacare.

But eliminating the mandate may be too costly financially, as it is expected to generate between $46 billion to $100 billion over the next 10 years to pay for coverage expansion.

"The employer mandate doesn’t have a huge impact on insurance coverage. But it does raise a lot of money," said Jonathan Gruber, an MIT economist who advised the White House on crafting Obamacare. "So really the question is how to (or whether to) make up that money."

And while many Democrats aren't yet going after the employer mandate, the issue is heating up the ballot in places like conservative-leaning West Virginia, where Democratic Secretary of State Natalie Tennant is running for the U.S. Senate and says she opposes the mandate.

"Washington should be having a serious conversation about getting rid of the so-called employer mandate," Tennant told Politico. "The facts show it doesn’t do much good for the workers who need it most, or help many people get insurance. The longer Washington puts off that conversation by delaying the rule instead of getting rid of it, the longer small-business owners are stuck in limbo, waiting to plan for the future or holding off on hiring that extra worker."

Senate Majority Leader Harry Reid, D-Nev., though, has not been willing to allow votes of repealing or revising the mandate, and Republicans like Maine Sen. Susan Collins say the White House is to blame.

"The White House is putting a lot of pressure on the Democratic leadership to not allow a vote on a significant change to Obamacare that would likely pass," said Collins, who is one of 31 Republican Senators sponsoring a bill to repeal the mandate. She also wants a change to lengthen a full-time workweek under Obamacare from 30 hours back to the traditional 40.

And liberal-leaning groups like the Urban Institute and the Commonwealth Fund agree, saying that the employer mandate could be eliminated because most large employers already offer health coverage voluntarily.

But White House officials say they are not ready to reject the mandate, which still has its defenders among liberal groups and politicians.

"When you still have 9 percent of the medium-size employers who are not providing coverage and even a tiny percent of the largest employers, I think having a mandate is likely to improve that coverage," said Families USA executive director Ron Pollack.

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