Posted on 05/24/2017 12:27:14 PM PDT by grundle
Last week’s CNN debate between Ted Cruz and Bernie Sanders on the future of Obamacare was a first-rate political broadcast. It was substantive, focused, and illuminating — an absorbing clash between senators representing two very different ideological approaches: political programming that genuinely left viewers with deeper insight into a pressing question of public policy.
One segment of the two-hour encounter was particularly revealing.
The subject was the burden imposed by the Affordable Care Act on small businesses — especially those with fewer than 50 employees, the threshold at which the law’s employer mandate kicks in. Audience member LaRonda Hunter, the owner of five hair salons in Forth Worth, posed a question:
“We employ between 45 and 48 employees,” she began, explaining that she wanted to open more salons and employ more people. “However, under Obamacare, I am restricted, because it requires me to furnish health insurance if I employ more than 50 people. Unfortunately, the profit margin in my industry is very thin, and I’m not a wealthy person. . . . My question to you, Senator Sanders, is how do I grow my business? How do I employ more Americans without either raising the prices to my customers or lowering wages to my employees?”
Here was a real-world example of Obamacare’s impact. By compelling companies with 50 or more workers to offer health insurance to everyone they employ, the law creates a powerful disincentive for business owners to expand beyond 49 employees. A business owner like Hunter faces an impossible dilemma: Either give up on growing her enterprise, or try to make ends meet by charging customers more and paying workers less.
The onerous employer mandate is one of the Affordable Care Act’s worst defects. The Obama administration repeatedly delayed its effective date; Republicans want it repealed altogether. Sanders must know Hunter’s predicament is not uncommon, and the CNN debate gave him the chance to explain how Democrats propose to address it. But his explanation amounted to: Tough.
“Let me give you an answer you will not be happy with,” Sanders said. “I think that for businesses that employ 50 people or more, given the nature of our dysfunctional health care system right now, where most people do get their health insurance through the places that they work, I’m sorry, I think that in America today, everybody should have health care. And if you have more than 50 people, you know what? I’m afraid to tell you, but I think you will have to provide health insurance.”
Hunter tried again: “How do I do that without raising my prices to my customers or lowering wages to my employees?” Sanders: “I certainly don’t know about hair salons in Fort Worth. But I do believe, to be honest with you, that if you have more than 50 people, yes, you should be providing health insurance.”
The exchange could not have been more enlightening. For entrepreneurs like Hunter, a mandate to supply health insurance triggers inescapable, and unignorable, consequences. For Sanders and other defenders of Obamacare, those consequences are irrelevant. They believe in the employer mandate — a belief impervious to facts on the ground.
Lawmakers so often enact far-reaching rules with worthy intentions, but little awareness of how much harm government burdens can cause.
Sometimes, belatedly, they come to understand how clueless they had been. As a congressman, New York’s Ed Koch routinely voted for liberal social and welfare proposals. Only much later, after leaving Congress and observing the practical impact of all those rules and programs, did the scales fall from his eyes. “I was dumb,” Koch told an interviewer in 1980. “We all were. I voted for so much crap. Who knew?”
Years later, an even more liberal Democrat expressed similar regrets.
After a long career in Congress, former senator George McGovern tried his hand at running a business — a small hotel in Connecticut. “In retrospect,” McGovern wrote after the inn went bankrupt, “I wish I had known more about the hazards and difficulties of such a business. . . . I also wish that during the years I was in public office, I had had this firsthand experience about the difficulties business people face every day.”
Government’s power to do good is limited, and heavy-handed regulation habitually proves counterproductive. If Bernie Sanders had operated a few hair salons before going into politics, he would know that, and he’d be a better senator as a result.
That Obama is a liar?
This is from the *GLOBE*? That bastion of Boston liberalism? I am truly shocked.
I love articles or arguments that have one example. It proves anything anyone who can come up with that example wants. It’s not like we’re having a Kardashian ass-measurement contest or anything important like that, after all.
“We employ between 45 and 48 employees,” she began, explaining that she wanted to open more salons and employ more people.
If she franchised her operations, she could dramatically increase her influence in the business and avoid costly decisions about a labor cost (healthcare). And the franchisee could also make a profit. If Colonel Sanders had one really big chicken place and not multiple locations, we probably would never have heard of him before.
Play the cards you are dealt, LaRonda.
Other businesses have a real problem with Obamacare regs. This one doesn't get my sympathy.
No it was in Kennebunk or Kennebunk Port. It was down a ways from the breakfast nook "The Egg and I" which was a haunt of some good friends of mine and they drove me buy McGovern's place in the early to mid-eighties.
Franchising is one answer and the real answer is one that hair salons have been using since forever: chairs/booths are available for rent by the hairdresser and they are independent contractors/business owners unto themselves. They set their prices, determine their services, and attract clientele by their offerings. There are no employees, or perhaps very minimal, to offer general support for all of the operators/hairdressers. Maybe one central reservation/booking clerk, a janitor to keep the place swept up, maybe a hostess to ensure the comfort of the clientele while waiting.
IOW, LaRonda is doing it wrong. IMO, of course...
I respectfully disagree. I was in a breakfast place with a friend of mine in 09’-10’ish and he went off to speak to the owner and came back and told me the conversation. It was not that dissimilar to the Hairdresser. He was not going to work his tail off for Obama and kept it @ 49 and either closed or gave to his kids a couple of restaurants to stay below the magic 50, it was a matter of principle. How many small businesses hunkered down and did this during the Obama Years and just waited him out? How many kept their capital close to the vest and didn’t expand or grow because of him and Dodd-Frank and Obamacare ? I spoke to the friend I mentioned above the other day and he noted their is still some small business residual closing much of which he’d lay at Obama’s feet.
That would be even better than franchising the whole store; LaRonda can be the real estate front person, control some of the advertising, etc. The important part of either scenario is that she needs to share with others. Maybe she just wants to keep all of the profits, with no incremental expenses once she gets over 50 employees. Get enough LaRondas in a room and you can have a special interest group.....
All they had to do was look at Hawaii.
For years Hawaii has had an employer mandate that required all employers to provide health insurance to employees who work over 20 hours per week. The result? Lots and lots of people with 2 or more jobs, none of them more than 20 hours a week each.
Employers who might have preferred full time employees, instead hire 1 or more part-time employees to do a particular job.
Small business owners will circumvent these kinds of mandates and have done for decades. The evidence is right there in plain sight ... they had all the information they needed that the mandate would not work the way they intended.
There is more to it than that. If she charges higher prices and/or pays employees less then she will lose business and have to cut back or fold.
In America today everyone can have "health care." Not everyone can or chooses to have insurance. That is two distinct subjects. Insurance is not health care. If Medicine and insurance were returned wholly to the market place with no government intervention then medical needs would be attend to at far less expense as competition would, as with any product or service, drive down costs while increasing efficiency and quality ̣(all three, of course, are the same thing). The present system serves mainly to support the affluence of thousands of government employees and insurance employees and the tremendous salaries and perks of CEOs. That adds tremendously to the cost of medicine while the regulation and the third party payment system adds tremendous costs in paperwork and compliance to regulations. The government piles costs upon costs on Medicine then proposes to cure the problem by increasing the costs and impoverishing the citizenry in the process. When the government makes all your choices for you it increases the costs of those choices for you and "disposable income" disappears as a concept.
By design AHCA is supposed to fail (as written), thereby ushering in single payer (i.e. true socialized medicine).
Why? Because AHCA is supposed to function as cursory health care program, with the added convenience of another easily accessed pot of money the government can, and will dip into at their discretion.
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