The businesses that face potential penalties are those with 50 or more full-timers or full-time equivalents (FTEs) as well as owners with multiple businesses totaling 50 or more full-timers or FTEs

The penalties are steep.  For employers that do not provide health insurance coverage, the penalty is $2,000 per year per employee (minus the first 30 employees).  For employers that do provide coverage, if one or more of its employees receive insurance subsidies, then the business will pay $3,000 per subsidized employee or $2,000 per employee (minus the first 30) – whichever is less.

Readers of this site know that we always look at incentive structures.  We know that changing the rules of the game, the rewards and the punishments, will change economic behavior.

NFIB economists predict that the mandate will affect the economy in the following ways.

Businesses will spend real resources determining how many employees they have with respect to the employer mandate. They will face time-consuming, arbitrary administrative burdens associated with employees seeking insurance subsidies in the new insurance exchanges.

The mandate makes it extremely expensive to cross the 50-employee threshold. For example, a mid-sized restaurant that goes from 49 to 50 employees will face a $40,000 per year penalty. A business can avoid the penalties by firing employees, by not hiring new ones, or by outsourcing. Estimating the costs of hiring and expanding will be complex and confusing.

Businesses subject to the employer mandate will receive monthly government reports on subsidized employees that inadvertently reveal personal financial data on employees’ spouses and families. This raises discomforting privacy concerns and exposure to liability for employers.

For some firms, the employer mandate will result in large fines when there are private changes in their employees’ households. For example, an employee’s spouse losing a job or an employee’s spouse’s elderly relative moving into their house could trigger thousands of dollars in annual penalties. Employers will not be entitled to know the details of what caused their penalty – unless they challenge the employee’s honesty before a government agency.

The employer mandate will increase costs, and producers will pass them along to consumers.

U.S. small businesses are slightly more optimistic about their economic outlook than they have been in the last two years but are still not ready to expand staffs and boost capital spending, according to a survey released Tuesday.

“The recovery in optimism we are currently experiencing is very weak compared to recoveries after 1982 or 1975,” the survey concluded. “The May Optimism index is a shade better than April but remains well below the other recovery trajectories.”

The NFIB survey of 823 businesses through the end of May showed that more small businesses are experiencing weakening sales than are enjoying sales improvement. Widespread price cutting was also reported, it said. May was the 18th consecutive month in which more business owners reported cutting average selling prices than raising them.

Eighteen straight months of price cuts.  You’re not going to get expanded hiring and capital investment when your margins are compressing simultaneously with a sales decline.

Unfortunately, we look like we are on our way to having a double-dip recession.

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Why is the financial scam of Managed Care not being exposed?

I cannot understand why the media and we docs are not exposing the financial scam of Managed Care. Readers need to google “Bill McGuire” the former CEO of United Health who was given a $1 Billion benefits package. Read the front page Wall Street Journal and New York Times Articles from December 7, 2007 highlight the $660 million fine McGuire had to pay for back dating stock options and the $800 million in stock options he had left over.

Do you recall when United Health held news conferences and was on all the networks a few years back?  United Health announced it was no longer going to require prior authorizations and then not so publicly instituted a policy of not guaranteeing payment. The standard Managed Care practice now is to deny 30% of physicians billings because Managed Care has calculated that Docs will simply not take the time to appeal as much as 1/3 of denials.

Do we not realize that we are paying an ever increasing ”tax” in effect to Managed Care Executives?  Last year 3 of the largest Managed Care companies raised premiums 26 % while only increasing payments 6% for services. On average the highest paid CEO’s are Managed Care CEO’s. When the Catholic Nuns ran the largest health care system Sister Mary CEO did not get paid a salary. There is a calcualtion called dollars lost from actual provision of healthcare and supposedly Medicare loses $6 for every $100 and Managed Care loses nearly $30 for every $100 with most of this $30 going to Executive compensation. Additionally 6.9 % of healthcare dollars are lost to the time doctors spend on dealing with Managed Care authorization paper work.

Is anyone questioning how 80% of Americans are supposedly happy with their current health care? Since 20% of Americans do not even have health care coverage this means that there is 100% satisfaction of those who do have coverage. This makes no sense. Any of us who have a health plan have watched the increasing portion of our pay check going to managed care. My first employee health plan many years ago cost me nothing and had no copays. Gradually I have paid larger and larger portions of the premiums and the copays have escalated and the coverage shrank.

If Americans are happy it is because they do not look at their pay check and are not realizing the “tax” they are paying to Managed Care CEO’s. The flattening of incomes and the declining of purchasing power is directly related to the thievery of Managed Care. Doctors salaries have been stagnant by and large since 1992 yet we have allowed ourselves to be scapegoated in this process. If we do not disclose the evils of Managed care we are doomed.

Managed Care lobbyists are going to be succesful in maintaining their strangle-hold by getting a mandate for insurance and a mandate for more employer sponsored care. If Americans are happy it is because doctors are fighting the denials and doing all the authorizations and doing all the care free by phone and employers are doing all the leg work arranging the plans and American industrial production and workers are economically suffering as a result.

The only ones ‘doing well” in this system are the Masnaged Care executives and perhap Managed Care shareholders. This needs to stop. Healthcare needs to be disconnected from employment, and patients, not doctors, need to deal with insurance denials then there will be true competition because patients will not put up with what doctors have put up with from Managed Care. We need to call upon the media to do its job and expose Managed Care for what it is a profit scam for its own Executives.

Dr.  Barry Jacobs is a Reproductive Endocrinologist, practicing in Carrollton, Texas, a northern suburb of Dallas. He completed his residency training in obstetrics and gynecology at Baylor College of Medicine in Houston, and remained at that institution to become its first fellow once Baylor achieved accreditation for an advanced training program in Reproductive Endocrinology and Infertility. Dr. Jacobs has served on the faculty of several medical schools and was director of Reproductive Endocrinology at Texas Tech Health Science Center in Amarillo. Currently, in addition to his clinical activities caring for infertile patients and those with recurrent pregnancy loss, he is Chairman of the IVF committee at Baylor Medical Center in Carrollton.

[A] new provision in the health care bill will require businesses to count part-time workers when calculating penalties for failing to provide coverage.

As we warned in in October of last year measures such as these hurt small businesses and part-time workers (particularly students, working mothers, and people who work for companies with a seasonal bent), leading to more unemployment and more mis-allocated resources in the economy.

Ed Morrissey from Hotair.com issues his analysis and warning today, too.  He’s spot on.

This change in the parallel bill would have a big impact on small businesses, who already have trouble competing with their larger competitors.  It will force businesses into either paying for benefit packages that they can’t afford with their current staff levels, pushing them either into cutting staff to recoup the costs or shutting their doors altogether.  It will have a major impact on the part-time labor market, which supports student workers and second earners in families under normal economic conditions.

Today Rasmussen reported that 57% of American’s think that ObamaCare will damage the economy.  They’re right.

U.S. employers who tell workers to stay home when they are sick will have to give them paid time off for up to five days under new federal legislation proposed on Tuesday.

Is this a good idea?  Let’s look at the incentives.

First thing that really jumps out is that you’re now incentivizing businesses to NOT tell workers to stay home when they’re sick!

Next thing that jumps out is that if companies somehow overcome this incentive to not send sick workers home but are going to be forced to pay for all non-work from sick employees, guess which kinds of people aren’t going to be able to find work?  Right.  Those more prone to sickness, i.e. the weak and poor.

Just another example of how a government program will hurt the very people it purports to help.

By requiring payment for sick leave, you introduce discrimination against the weak and incentives to invite more illness into the workplace.  Let the market work this out, not bureaucratic central planners.  Employers know they have to strike a balance with their employees, their workplace, their customers, etc.  By mandating a certain, somewhat arbitrary course of behavior that the people involved have not contracted, the government creates perverse incentives that really do nothing to remedy the underlying concerns.

Also, if you’re not careful, you’ll get people faking illness (claiming they have symptoms that they don’t), or not taking precautions against exposing themselves to illness.  If you know you’ll lose pay if you get sick, you take precautions to avoid illness.  However, if you know that if you’re sick you’ll get paid anyway and can sit at home and watch TV, you’ll be less inclined to take close care of your health.  Think not?  Then you don’t understand people and their economic calculations.

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