The Real Reason Obama Delayed the Employer Mandate

The Real Reason Obama Delayed the Employer Mandate

By David Flanaganon Wed, 3 Jul 2013

In what NBC’s First Read calls a “perception problem for the White House,” and those of us here in Realityland call a major setback, President Obama decided to delay the implementation of the Affordable Care Act’s (AKA, Obamacare) employer mandate. Of course NBC defends the president’s decision, even while pointing out in the nicest possible way that it’s yet another problem for the struggling president. NBC’s take is that this is a “P.R. black eye for the White House,” but then concludes by saying that “the reality is a much more nuanced story.” In essence, NBC attempts to make the case that the president did the tough thing for all the right reasons.

In the Weekly Standard, however; James Capretta has a somewhat different take on the move. Capretta writes “the delay is an embarrassing move for the White House and will create some serious new headaches for Obamacare’s defenders.” Someone may want to get those Obamacare supporters some Advil; stat!

Capretta wonders if perhaps the Obama Administration has been hearing some threatening noises from the business community lately. More likely is that it’s been forced simply to bow to reality. The employer mandates, even pre-implementation, are already damaging the economy and will do exactly what many conservatives, such as those atRightpundits.com, have been saying all along; force some employers and incentive others to drop medical care for millions of employees.

It’s been clear for months that employers across the US have been moving full time workers to part time and cutting part time hours to less than 30 hours. And while businesses brave enough to speak up about this necessity have taken heat from Obamacare supporters, even local governments have been cutting hours in preparation for the employer mandate. What’s been glossed over and downplayed by the administration, however, is the fact that many employers will simply choose to drop health benefits altogether. The employer mandate was designed to have exactly this effect, despite the president’s promise that “if you like your healthcare plan, you can keep it.”

For employers, if the choice is either to drop coverage completely and pay a small fine per employee or shut down the business entirely, they’re obviously going to drop coverage. The result, of course, will be to leave potentially tens of millions without coverage.

At the same time, with many states having refused to set up exchanges because of long-term costs involved in maintaining the exchanges, that would leave most in difficult circumstances, even as Obamacare’s personal requirement kicks in. Imagine the blowback to the administration over this; millions left without insurance and no public exchanges. Of course, the Obama Administration and supporters would blame Republicans, but whether the public would accept the excuse or not is anyone’s guess, especially as some prominently conservative states such as Arizona have implemented exchanges.

This is the grim reality (welcome to Realityland Mr. President!) leading to his decision to delay the employer mandate. Were the employer mandate to remain in place and the disaster described to unfold, an already unpopular government program would likely have wreaked significant electoral damage on Democrats.

But wait, you say, the President only delayed it a year. It could still damage Democrats in next year’s mid-terms. True, but it’s less likely to do so, and it gives Democrats more time to try and fix the system before it’s implemented. Also, were the president to delay it longer than a year, it would have been tantamount to saying, “this will never work.” It would be, in a sense, the president vetoing what he himself considers to be one of the greatest accomplishments of his administration. It would be better if Congress did that for him and let him off the hook, don’t you think?