Posts Tagged ‘health insurance’

poor childI reproduce this article by Emily Hulsey word for word from the Independent Journal Review in order to show categorically that Wellthisiswhatithink is not rabidly one-eyed as regards Obamacare, and also because we believe we do our readers no service by ignoring issues when they arise just because they’re showing the side of politics we support in a poor light. Someone in the President’s office needs to answer this concern directly, Democrats must hold the executive to account, and lawmakers from both sides owe it to working people to correct the mistake promptly. There are things in the article I dislike – Obamacare is not a “terror”, that’s a nonsense. But the substantive point needs answering, and fast.

Article begins:

“family glitch” in the Affordable Care Act could cost families thousands of dollars and leave as many as 500,000 children without health insurance.

This problem is due to the way the health care law was written. The law requires that employers provide “affordable” health care to their employees; it defines affordable as “9.5% or less of an employee’s household income.” However, it does not require that employers provide “affordable” care to their employees’ families. The results are terrifying:

That can make a huge difference; the Kaiser Family Foundation said an average plan for an individual is about $5,600, but it goes up to $15,700 for families. Most employers help out with those costs, but not all.

Unlike part-time or unemployed workers, those who are offered “affordable” insurance by their employers but choose to order from the health care exchanges will not receive any government subsidies to help with the costs.

“We saw this two-and-a-half years ago and thought, ‘Has anyone else noticed this?’” said Kosali Simon, a professor of public affairs at Indiana University who specializes in health economics. “Everyone said, ‘No, no. You must be wrong.’ But we weren’t, and that’s going to leave a lot of people out.”

Thousands of people are going to be in a Catch-22 when it comes to buying insurance for their spouses and kids. Their only options will be to pay astronomically high prices through their employer or to pay astronomically high prices through the government exchanges. Many parents will simply not be able to afford it. As a result, up to 500,000 children who don’t qualify for government assistance could go without healthcare.

Here is an example of what could happen:

1. Single mom Jane works full-time for ABC Corporation. Her employer is complying with the new insurance changes required by Obamacare.

2. Jane is told that her employer will be switching health insurance plans in January. She learns that her premiums will be about the same as they have been – about 9% of her total income. However, the premiums for her children are expected to double.

3. Now unable to afford coverage for her children under her employer’s insurance, Jane decides to shop through her state health care exchange, only to learn that those prices are even higher. She uses the exchange’s subsidy calculator, but it informs her that she doesn’t qualify for any government help since ABC Corporation offers coverage to its employees.

4. Jane realizes that she has no way to provide health insurance to her kids. She makes too much, in the government’s eyes, to qualify for Medicaid or CHIP. She cannot afford the premiums offered by her employer, and she cannot afford individual plans without qualifying for a subsidy.

This is a “glitch” in the law, and it is fixable. All Congress has to do is change the language of the healthcare law in one of two ways:

  • Require employers to provide “affordable” insurance to employees and their families, not just employees, OR
  • Require the government to offer subsidies to dependent family members who do not have access to “affordable” healthcare through an employer.

If the law is not fixed by the time the employer mandate rolls out (and let’s not kid ourselves here), thousands of families will have zero access to affordable health insurance for their spouses and children. This glitch is just another casualty of the terror that is Obamacare, but it is an especially painful one.

When I was in school, our teachers drilled into our head the mantra, “Always double-check your work.” The lawmakers who supported the Affordable Care Act failed to double-check the work. It was written in haste and carelessly passed into law.

The Democrats put party lines and political carelessness ahead of their commitment to pass laws that will help, not hinder, their constituents. Now the American people – children – are the ones who will pay for their irresponsibility.

A little while back, a big brouhaha broke in the States over a chicken fast food chain called Chick-fil-A.

The business, hitherto best known for its amusing billboard advertising, became the centre of a storm when key personnel spoke out against gay marriage, prompting calls for a boycott of the business.

Perhaps Chick-fil-A should have stuck to their knitting.

Their cause was taken up by right wing conservative commentator Mike Huckabee resulting in a highly successful protest in favour of the company’s position, when sales in one day went up 29%. However quite recently opinion polling revealed that some 13% of people were still considering or actively boycotting the business.

As recently as two days ago, the controversy continues to rumble. The long term effect on the brand is, as yet, unclear.

Now, a similar controversy has broken over another fast food company. And calls for a boycott are growing fast.

Pizza maker Papa John’s chief executive John Schnatter has criticized President Obama’s health-care law and said it will raise costs by 15 to 20 cents a pizza.

The blow-back has been fierce:

Papa John’s pizza extortion,” ran the headline for a story Wednesday from Salon, an American news website.

Vote for Romney or we’ll raise our prices” was how Daily Kos, a liberal news site, topped its story , which went on to illustrate Mr. Schnatter’s links to the GOP presidential candidate..

Some Twitter and Facebook users are now actively urging a boycott of the Kentucky-based pizza chain.

This is not what you want to see on your Facebook page when you check it over breakfast.

Nor this. See the ease with which the graphic encourages people to hit the Share button on Facebook? Be afraid. Be very afraid. You do not want this on a couple of million customer’s FB pages overnight.

But the Christian Science Monitor, for one, argues that such reactions may be overdone. They ask: was Mr. Schnatter making a political threat – or simply explaining the economics of the pizza business? Well, you be the judge.

In the middle of an Aug. 1 conference call with reporters and analysts to discuss the chain’s second-quarter results, Schnatter was asked about the impact of the new health-care law on Papa John’s. Here’s what he said, according to a recording of that call on the company’s website:

“Our best estimate is that the Obamacare [law] will cost about 11 to 14 cents per pizza – or 15 or 20 cents per order from a corporate basis. To put that in perspective, our average delivery charge is $1.75 to $2.50 – or about 10-fold our estimated cost of the Obamacare [law] to Papa John’s.

We’re not supportive of Obamacare, like most businesses in our industry. But our business model and unit economics [are] about as ideal as you can get for a food company to absorb Obamacare. We have a high ticket average with extremely high frequency of order counts – millions of pizzas per year. To give you an example … let’s say fuel goes up, which it does from time to time, and we have to raise delivery charges. We don’t like raising delivery charges. But the price of fuel is out of our control, as is Obamacare.

So if Obamacare is, in fact, not repealed, we will find tactics to shallow out any Obamacare costs and core strategies to pass that cost onto the consumer in order to protect our shareholders’ best interest.”

CSM believe several points stand out: The 15 to 20 cents he’s talking about are costs, not prices. If he was making a political statement, would he really make the point that delivery charges, based at least in part on fuel costs, are 10 times the size of the hit from Obamacare? And he is promising to cut or “shallow out” the costs of healthcare before passing any price increase to the consumer.

Is that a threat? Really? I guess it depends on what “shallowing out” costs actually means.

Schnatter is certainly no fan of the president or the health-care law. Who knows? Perhaps he will cut health-care costs by laying off or shafting his employees. But, the CSM argues, he deserves to have his words quoted in context, before another battle of the culture war is fought over fast food.

Fair enough. What is certain is that the row over his words is likely to grow. Like a brushfire. And it highlights dramatically the care that business owners and managers must take when commenting, in whatever medium, on controversial political issues.

At Wellthisiswhatithink we believe that it would not be a good thing for business to be prevented from expressing its point of view through fear of igniting controversy – it is, when all’s said and done, a key segment of society and we need to know the perspectives it holds, and why it holds them, given that “business” is somewhat opaque to the non business community.

But look out: the swamp is full of alligators, and treading warily would seem to be in order.

What a smart thing it might be, for example, for Boards of Directors to deliberately seek out and include ex-officio Directors with different points of view to their own, who might be closer to the general public, and with a better than passing knowledge of the likely public effect of policy decisions. The same could be said of a Board’s approach to environmental issues, risk management issues, (hello, BP, we’re talking to you), personnel issues generally, and many more.

“What’s on for the weekend, Bill, taking the boat out?” “Hell no, Ted, I’m heading for the mosh pit at the Midwinter Rave. Just love that feeling of mud on my jeans and getting off my face.” Yeah, right.

When companies are basically run by a group of accountants, lawyers and entrepreneurs, they can get a very narrow view of the society in which they do business. And when those same people leave work for the day, they often – not always, but often – circulate in a social milieu that usually does very little to broaden their horizons. It’s called “living in the bubble”. When a storm breaks, they are generally shocked and scramble to play catch up, often ineffectively.

As an adviser to business, I have sometimes found the upper echelons of management to be staggering insular, tone deaf to the likely public impact of their activities or statements, and completely lacking understanding of how social media has fundamentally altered the rules of the game, and as a result – essentially – they are riding for a fall.

It will be interesting to watch how Papa John’s deal with the crisis. The cost of getting it wrong will be a hell of a lot more than 14 cents a pizza, that’s for sure.

Some more examples that we have covered of how NOT to embrace social media can be found here, concerning recent industrial disputation and management actions at Australia’s national airline: and here: A very funny and cautionary tale.

Anyhow, as we all sit mesmerised with horror at the new power of social media, my final word to managers and Directors is very simple.

For more than 2,000 years, Christian society has been based on what is known as the Golden Rule. To wit:  “Do unto others as you would have done unto yourself.”

Why not try applying that rule to your next major decision? Forget what you think is your responsibility to your shareholders, just momentarily, and imagine you are your customer. You will soon find, I assure you, that building shareholder value isn’t actually about pinching pennies here and there, it’s about providing world class products and services. World class.

Because in an internet world, world class is the new basic standard. Think about it.

More interesting coverage is here:  I note his share price is now down more than 4%. Bet his shareholders are delighted.