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Views: Coverage cuts add more problems to Obamacare

Published: Saturday, Feb. 1, 2014 5:30 a.m. CST

President Obama couldn’t have been more emphatic. Critics of the Affordable Care Act were predicting it would encourage employers to stop offering health insurance to their workers, forcing them to find new, and possibly more costly, coverage on the Obamacare exchanges.

The president had long scoffed at such predictions, and at a White House news conference last April, he sought to put the idea to rest once and for all.

“For the average American out there, for the 85 to 90 percent of Americans who already have health insurance, this thing has already happened,” he said of Obamacare. “And their only impact is that their insurance is stronger, better, more secure than it was before. Full stop. That’s it. They don’t have to worry about anything else.”

Obviously, millions of Americans who purchased health coverage on the individual market did have something to worry about. And now, it’s clear that some who have health coverage through their job should be worried, too.

Recently, Target announced it will drop the coverage it offers part-time employees, effective April 1. They will now be required by Obamacare’s individual mandate to find coverage elsewhere.

Target has a lot of part-time employees, but just a few of them – about 10 percent – opted for coverage through the company. Now, they will most likely purchase insurance on the exchanges.

Target isn’t alone in making such a decision. Home Depot, Trader Joe’s and others have also dropped coverage for part-time workers. More companies will certainly follow because Obamacare offers a clear incentive for them to drop such coverage, especially since they can now say they’re actually doing workers a favor by allowing them to buy coverage they “may prefer.”

Perhaps more importantly, though, Obamacare could be creating a two-tier system inside the employer-based system. Good coverage still is a benefit, and companies will include it as part of the compensation packages it offers the most sought-after workers. But employees lower down the ladder? Not so much.

And that doesn’t mean just part-time employees. Obamacare could affect health coverage for millions of Americans who didn’t think they would be affected.

The president’s assurance was uttered long before his you-can-keep-your-coverage promise was exposed as false. Now, Americans know better than to believe what they hear.

• Byron York is chief correspondent for The Washington Examiner.

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