The Daily Reckoning

Perhaps the question is no longer if Obamacare will wreak havoc on the American economy.

Instead, the query seems to have morphed into something far more dire and prophetic: Just how much chaos will the law inflict upon the American people, businesses, and the economy?

Many wonder, too, if the law will actually improve the country’s health care system.

The law is having a rough spring, with criticism coming from its own architect, job creators worried about health care mandates, and science itself.

Formally known as the Patient Protection and Affordable Care Act, Obamacare should be fully phased in by Jan. 1, 2014. As the date creeps up on the federal government, some, including the point man behind the law, grow nervous about implementation.

Baucus predicts a “train wreck” if HHS botches Obamacare implementation.

“I just see a huge train wreck coming down,” Montana Democratic Sen. Max Baucus, the politico who spearheaded the reform effort, told Health and Human Services (HHS) Secretary Kathleen Sebelius at an April 17 hearing.

The now-retiring Baucus expressed grave fears that HHS isn’t adequately prepared to administer the complex law.

Republicans quickly pounced on the Democrat’s words, saying his admission is an early sign of the law’s failure. Democrat Senate Majority Leader Harry Reid, of Nevada, affirmed Baucus’ position two weeks later, warning that the federal government must have adequate resources to set up the law and educate the public about its benefits.

Any taxpayer-funded public relations push would have to perform mightily to match the negative anti-Obamacare vibes spilling out of America’s private sector. Job creators routinely forecast dire effects they believe the law will have on hiring.

“Prior to the law’s enactment, my goal has always been to hire fewer people for more hours,” said Georgia Burger King franchisee Brian Vaughn in November 2012. “Now, because of what Washington has mandated, it seems to make more practical business sense for me to hire more people for fewer hours.”

What Washington mandated is this: Businesses with more than 50 workers must offer health insurance to employees who work 30 hours a week or more or face a significant penalty.

Some large businesses are already adjusting to cope with the requirements. Regal Entertainment, the nation’s largest cinema purveyor, announced last month that it would cut hours to avoid paying the penalty or providing insurance.

A Regal manager who asked to go unnamed told Fox News that Obamacare is drastically reshaping the job market — not in a good way.

“It fosters a new business culture where 30 hours is now considered the maximum in order to avoid paying the high costs associated with this law,” the manager said.

A UC Berkeley Center for Labor Research and Education study released recently reveals that Obamacare puts more than 2.3 million low-wage workers at risk of losing hours.

Large businesses might be able to cope with the law, but some worry that small businesses will suffer irreversible damage.

Marcus says Obamacare will destroy America’s small businesses

“Obamacare is going to kill off small businesses,” Home Depot’s retired co-founder Bernie Marcus told Newsmax in April. “Obamacare is the capper. That’s the bullet to the temple.”

Marcus said he worries that copious government mandates — particularly those in the health care law — will burden small businesses and halt growth.

It’s a common belief. Each quarter, the U.S. Federal Reserve publishes its Beige Book, essentially a document taking the temperature of the American economy. The report outlines the uncertainty surrounding Obamacare.

“Employers in several districts cited the unknown effects of the Affordable Care Act as reasons for planned layoffs and reluctance to hire more staff,” the report explains.

How disastrous has spring 2013 been for President Barack Obama’s health law? Consider that less than a month ago, the United Union of Roofers, Waterproofers, and Allied Workers, an early Obamacare supporter, called for its repeal.

“In the rush to achieve its passage, many of the act’s provisions were not fully conceived, resulting in unintended consequences that are inconsistent with the promise that those who were satisfied with their employer-sponsored coverage could keep it,” the group wrote April 16.

Politics and jobs asides, many still wonder how effective the massive overhaul will be in improving health care and controlling exploding costs.

Americans have relatively low expectations on the topic. A March 2013 Kaiser Family Foundation health tracking poll said that 55% of respondents believe Obamacare will not stop rising health costs. Asked if they believe the health law will improve the quality of care, 45% of survey takes said no.

Medicaid expansion, a vital component of the overhaul, sustained a serious blow last week.

As part of Obamacare, millions of Americans will join Medicaid, thanks to expanded eligibility. A newly released study out of Oregon, though, revealed that while the Medicaid helps people pay their bills and avoid depression, it does little to actually improve the health of program participants.

At least 28 states will expand their Medicaid programs, while 20 others, mostly red states, declined to swell the ranks. The other three are still weighing their options.

Sincerely,

Dustin Hurst
Original article posted on Laissez Faire Today

You May Also Like:


Why You Should Take Your “Health” Into Your Own Hands

Addison Wiggin

It’s come to this: A typical family’s health insurance costs as much as a typical family car.

The Daily Reckoning

It's hard to believe that more than ten years have gone by since we began writing The Daily Reckoning out of a Paris office back in July of 1999?

Since then, a lot has changed. We have seen the dot com boom and bust... a massive expansion of credit...real estate mania and meltdown?and epic highs and lows in the markets.

Nothing about the past ten years has been boring. And we have been there throughout, trying to help readers make some sense out of our global economy. And hopefully providing a few laughs along the way.

In short, we pen The Daily Reckoning each day -- for free -- to show you how to live well in uncertain times. We aim to make each article the most entertaining 15-minute read of your day.

Recent Articles

Big Opportunity in the “Baby Bakken” Oil Field

Matt Insley

As the U.S. "shale gale" nears its 10th birthday, it appears the America energy renaissance has outlived its critics. Still, it's natural to wonder whether all the big gains are behind us. Today, Matt Insley reveals the newest shale hotspot, and explains why there's still plenty of opportunity left in the U.S. energy boom. Read on...


Maestro
The Real Reason the US Media Hates Vladimir Putin

Marc Faber

The U.S., Russia, the EU and Ukraine all met in Geneva, where all sides agreed to halt all violence and provocations in Ukraine. But the news media are still taking an antagonistic stance toward Vladimir Putin and Russia. What gives? Today, Marc Faber explains the hypocrisy behind U.S. foreign policy... and the BS the news media are pushing about it...


Video
How a Toy Robot Upended the Aerospace Industry

Kate Incontrera

One of the world's foremost innovators - Wired Magazine's former editor-in-chief, Chris Anderson - talks about the future of innovation, his company 3D Robotics and how he built the world's first Lego-operated drone at his dining room table.


Laissez Faire
The Only Solution for the Obamacare Problem

Loren Heal

Politicians talk about the uninsured. Special interests argue on behalf of those with pre-existing conditions. But why is no one wondering how doctors are affected by Obamacare? They're the ones on the front lines dealing directly with new patients, as well as the red tape that makes bureaucracies go round. Loren Heal explores further...


Huge Gains From Smart Money With No Sex Appeal

Greg Guenthner

Since the beginning of March, hedge funds have been steadily moving out of growth stocks. So it's not coincidence this sector has fallen in tandem. But the question is, where is the "smart money" headed now? Greg Guenthner examines the current, decidedly "unsexy" trend in the market. Read on...