Employer Coverage Dumping - A Prediction Coming True

In May of 2010 I wrote this about the impact of the then-new health reform law on employer-sponsored coverage:

More employers, already at or near the break point of providing health insurance coverage as an employment benefit, will elect not to

Today, there's this from Avik Roy at Forbes:

there’s a new study that suggests that employer dumping under Obamacare could be significant, leading to an explosion of the law’s costs and thereby the federal debt. A working paper by economists Richard Burkhauser and Sean Lyons of Cornell and Kosali Simon of Indiana, published by the National Bureau for Economic Research, examined various reasonable assumptions regarding the behavior of employers under the law.

Burkhauser and colleagues found that, in a worst-case scenario, the number of people covered by Obamacare’s subsidized exchanges could be more than double the estimates of the Congressional Budget Office and the Joint Committee on Taxation. “In the most dynamic case (broad affordability and maximum change in premiums)…Exchange coverage increases from 10.23…to 22.89 percent” of the privately-insured workforce. This would lead to worst-case of $48 billion a year in additional federal spending, according to a version of the study published by the Employment Policies Institute.

Well, hey. When your budget is $1.3 trillion in the hole, what's another measly $48 billion on top? Read the rest of Avik's post at Forbes here.

The Problem Isn't the Other Party - - It's Any Party

If the debt limit crisis pointed out anything at all, it's this: political parties are bad for the nation.

I'm aware that it borders on heresy to say such a thing out loud, let alone write it, but it's becoming increasingly apparent to me. Watching the bickering over the debt limit, though, I began to wonder if the solution was more about getting to say who won than about what would be best for the country.

The fallout from Standard & Poor's downgrading of the US credit rating has served only to underscore the point. The Obama administration has had nothing to say about the downgrade for days now, other than some mumbling about how it's all the Tea Party's fault. No plan to solve the problem; not even an acknowledgment that the problem exists.

The tea party phenomenon illustrates two things: first, the power of the swing vote. In a narrowly divided house, the last to get on board one way or the other decide the issue. Tea party adherents were able to hold sway because they were able to hold out, and this latter point is in fact the second illustration: the power of the party-less.

The tea party is not a party. It has no formal organization. It has no nominating process. You cannot register to vote as a "Tea Partier." It is, rather, a simple philosophy to which a number of representatives and senators have adhered.

When it comes time to vote, you cannot leverage a "tea partier." You cannnot call the party whip and have him (or her) lean on the representative. In contrast, if a Democrat wants to cross "party lines" on a vote, you can always have the President (if necessary) call up and tell the representative that if he doesn't vote a certain way his future in "the party" is finished. That worked for Representative Scott Murphy to get Obamacare passed. First Murphy voted against it; then the President called, and then he voted for it. What do you think the President told him? He told him to toe the line, that's what.

Every four years people start talking about our presidential primary system and what odd results it creates. A lot of people -- including me -- think we have had a poor slate of presidential candidates for the last five or six general elections. One year I wrote in "Mickey Mouse" as my vote for president because I couldn't bring myself to vote for either the Republican or the Democrat candidate. Or Ralph Nader. I understand that Mickey Mouse gets a couple ten-thousand write-in votes each election.

Some use this sentiment to indict the primary system. Usually those folks are trying to sell their own revamping of the primary system. Others will go so far as to say that it's a problem of a "two-party system." Those folks are usually trying to sell a third party. I think it is a deeper problem than either of these. I think it's a result of the party system in general.

The conventional wisdom is that presidential candidates have to go "ultra" (in whatever direction) in the primaries to get the nomination and then jog back towards the center in the general. This results in an interesting waltz. I think this is the reason why so many presidential candidates end up talking alot without saying anything. They really don't want to say anything, because whatever they say at the beginning of their campaign they'll have to disavow in just a few months. And if there's one thing you can skewer a candidate on, it's inconsistency. John Kerry: "I was for it, but that was before I was against it." Or something like that. Remember Clinton's (Bill's) "waffles"?

As an aside, I also think this is why most successful presidential candidates were governors and not senators. If you are a legislator, your philosophy is writ large in your voting record, and it's too easy to pull out votes and use them to make a candidate look inconsistent or, worse, duplicitous. Think McCain on that one.

So to get the party nomination, you have to fly the party colors in a big way, to please the party bosses. A party primary in this way amplifies the power of the fringe by eliminating countervailing votes. Imagine a room of 100 people attempting to elect a president. There are 5 insanely liberal people and 5 insanely conservative people. In a one-vote election, the whacknuts would cancel each other out. Candidates would therefore be wise to ignore the fringe, and concentrate on the middle.

But with a primary, the candidate must look only at his own half of the room. The 5 insanely liberal liberals are no longer a fringe cancelled out by the 5 insanely conservative conservatives. They are now 10% of the votes -- too big to ignore -- and their ultra-views are only partially moderated by those in the center.

This sort of phenomenon is not a function of a two-party system. It pertains whenever and wherever there is a "party" that needs to be pleased in order to get to the general.

Once in office, the elected party member has to consider the impact of his or her vote on the party. Hence, there is a means of leveraging votes to achieve party-satsifying results. There are so many examples of party votes that party influence on voting outcomes should be considered axiomatic.

And that is what scares the bejezus out of true "partiers" (of either stripe) about the tea party. There is no tea party. You can't get tea partiers to toe the line in any way other than selling them your idea. And if your idea stinks, it's not selling.

Should political parties be banned? Of course not. Not everything that is a stupid idea should be illegal. In this country, the right to freedom of association and freedom of speech is sacrosanct. But it would be nice to see the beginning of a public sentiment that political parties have caused more problems than they have solved, and that on the whole we'd be better off without them. It would be nice to see candidates for Congress abandon the party idea all together, and big dollar donations to boot, and instead campaign entirely on their ideas, using freely available social media tools to distribute them and engage constituents in dialogue.

Imagine what a class of unaffiliated representatives, who got into office purely on the strength of their ideas--not some arcane sense of party loyalty--could do for the idea of democracy. Could it possibly restore the sense that one's elected representatives are truly representing their constituents?

Maybe. Just, maybe.