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The Old Math

The government has unwittingly given away to big business a cheap and easy way to offload employee health care benefits altogether -- along with all their attendant administrative headaches and cost uncertainties.
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The Obamacare debates are heating up.

The latest dust-up is the so-called "business mandate."

Yes, the implementation of the business mandate is squirrely. How much time is part time? What constitutes essential health benefits? Will small business be forever stop growing at 50 employees? The 30 hours per week provision: how will the IRS average it over time -- weeks, months, years? Yada, yada, yada. TV talking heads are filling hours with these marginal issues.

But can we even call this a "mandate"?

In Germany in the 1880s -- Otto von Bismarck firmly established state supervision of business insurance for employees. Through two wars and economic collapses; from the Hohenzollern Monarchy to the Weimar Republic to National Socialism to Communism and finally Democracy -- through all that -- the Bismarck Model is intact today in Germany. Now that's a business mandate.

Here, the involvement of businesses in their employees' health evolved over time as a voluntary effort to help recruit and retain quality employees. My first nursing job in Colorado in 2001 was in the former Denver Rio Grande Hospital in Salida. Even then the building was more than 100 years old. This is where employees of the railroad used to recover from illness with gorgeous views of the Arkansas River.

During World War II, the trend accelerated, with Kaiser Shipyards being the most iconic paternalistic employer concerned with the health of their employees.

Today 49 percent of Americans are covered by health insurance at work. The average cost for a family of four in 2013 is $16,351 of which the family pays $4,565, with the employer balance computing then to $11,786. The individual pays $5,884 -- the individual's share $999 and the employer's $4,885. For the sake of talk, lets very conservatively put the combined employer contribution cost at $6,000/year/employee in the U.S. of A.

The Obamacare "mandate," euphemistically called the shared responsibility requirement (Patient Protection and Affordable Care Act, Title One, Section 1513, subsection 4980H, paragraph 3C, line 1), requires businesses to continue this policy at the risk of a $2,000/year penalty per uninsured employee. On the face of it, giving moneymen a choice between a $2,000 item on the expense ledger as opposed to $6,000 is an invitation for these bottom-line guys to shed health care benefits altogether.

The new exchanges, set to open for business October 1, 2013, make this maneuver practical. Individuals and families can sign up without worries about caps or preexisting conditions. The insurance is portable.

Federal largess will replace corporate contributions to employees with subsidies. For example, a family of four purchasing a silver plan (second-lowest price) would be eligible for a tax credit for the excess premium over 9.5 percent of their income if the income is belows 400 percent of the Federal Poverty Level. The Federal Poverty Level for 2013 for a family of four is $23,550. So, the threshold for their tax credits is $94,200. And what better time than now, with high unemployment and resumes pouring in over the transom?

The government has unwittingly given away to big business a cheap and easy way to offload employee health care benefits altogether -- along with all their attendant administrative headaches and cost uncertainties. Not that the Business Roundtable or other business lobbies necessarily want to roll the Obama White House, but certainly they now hold the upper hand. Already the business mandate has been postponed a year.

We can lay this gaff at the feet of the 111th Congress, whose Democratic majorities crafted the Affordable Care Act. The penalty, per employee, for businesses not providing health benefits should have had teeth: $4,000 to $5,000 (not $2,000) with criminal (not civil) enforcement... something the Iron Chancellor might have embraced.

We Democrats like to think we rise above the nitty-gritty of numbers. Our time is better spent browsing through literary classics and studying the Punic Wars. Like another Democrat, Bill Clinton (Class of '68), I went to the School of Foreign Service at Georgetown University (Class of '64). The Foreign Service School did not offer math.

Republicans may not read Tolstoy, but they know at a glance that $6,000 is more than $2,000.

For members of the Democratic Party, though, this intuitive leap seems more difficult.

The great intellects of our party should have gone back to the ancients and referenced Euclid's Axioms (circa 300 BC).

The proposition: 6,000 is greater than 2,000.

The proof:

Step #1
The three zeros in each number cancel each other out.
Now, you have a ratio, 6:2, but not in prime numbers.

Step #2
To solve this, divide the numerators by the common denominator of 2. This will yield a prime number 3 and a prime number 1.

Step #3
The number 3 can be divided by the number 1, but not visa versa.
The larger of the two numbers can only be 3.
Therefore -- choosing between 6,000 and 2,000 -- 6,000 is the greater sum.


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