Another day, another Obamacare horror story. The latest involves UPS, which has decided to eliminate health insurance for spouses who already get health coverage from their own employer. UPS has suggested that Obamacare was responsible for their decision, but I think Bloomberg has pretty much the right take on this:
It’s possible, of course, that UPS is using the health-care law as a smokescreen for cutting costs it wanted to cut anyway.
Ya think? I’d say it’s a safe bet that every employer in America that raises copays or reduces coverage or ratchets up employee premiums is going to try to blame it on Obamacare as a way of deflecting worker resentment at the news. It’s a pretty handy cudgel, after all. And right wing blatherers will all pitch in, painting it as the latest sign that President Obama is destroying America’s healthcare system before our eyes.
Needless to say, the evidence doesn’t really back this up. Will Obamacare have modest effects on some kinds of coverage and certain demographic groups? Sure. Are these effects either large or persistent? No. Jon Cohn provided the details a week ago:
UPS officials said that the company’s actuaries expected overall employee health costs to rise by about 12 percent next year—and that about a third of that increase was in reaction to Obamacare….But those are basically one-time increases—the result of changes that will take place only as Obamacare gets underway.
….Even UPS officials caution that Obamacare’s role in this decision isn’t as big as some are making it out to be. “One way of saying this is that we are restructuring our benefits ‘because of the ACA’—but that’s not accurate,” Andy McGowan, a UPS spokesman, told me. “We are doing this because we are looking at many different factors adding to our costs, and ACA is one of them.”
So at worst, what we’re looking at is Obamacare being responsible for a one-time cost increase of 4 percent—largely due to its requirement that health plans cover children until age 26, a provision popular enough that even Republicans claim to favor it nowadays. Considering that the cost of health premiums has nearly doubled in the last decade, this is neither a bombshell nor a sign of the imminent destruction of the American healthcare system. In fact, given Obamacare’s likely long-term moderating effect on healthcare premiums, it’s almost certainly going to end up as a net moneysaver for UPS.
But it won’t stop health premiums from continuing to rise, and it won’t stop companies like UPS from doing everything they can to reduce their healthcare spending. Big companies have been doing that for the past two decades, and they’ll keep doing it for decades to come.