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Health & Fitness

Obamacare works?

My Harlem-based grandson Joe Drew is a musician-entrepreneur who so far this year has played trumpet or conducted in the United States and Germany and who most recently deserted his wife and 2-year old daughter to go for a symphony orchestra gig in India. When Joe visits and through correspondence, he and I continually solve the world's problems. Here, he relays a real-world anecdote re Obamacare.

Hi Grandpa,

My Analog partner runs a small clock shop, and he just told his employees that he will no longer provide health insurance for them. I asked him for the numbers that helped him decide to send his employees to the Obamacare exchanges, and he used his top repairman as an example:

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The head of the repair shop is his highest-paid employee, at $27,000 per year. The shop paid $13,000 annually for his health insurance, which included full coverage for his 2 children (His wife was covered by Medicare).

My partner used a Kaiser-Permanente cost calculator to determine that under the federal exchange, the man's insurance would cost roughly $1,800 per year

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So, it was a no-brainer for the clock shop. My friend decided to give his employee a $6,000 raise and drop his health insurance. The raise is plenty to cover the cost of insurance on the federal exchange, and the remainder represents a 16% raise in gross pay for the employee. Meanwhile, the clock shop is able to reduce the cost of the repairman's job by 17%. 

Hearing him describe this scenario reminded me of how this has been a conservative idea all along. It's not unlike the idea of school vouchers, because, after-all, the clock shop is still paying for the repairman's insurance. But instead of compromising on the best plan for all employees, the employer is freed from this headache by giving the money directly to the employee and letting the employee decide for himself which plan suits him best. 

Both sides save money, and both sides have more freedom of choice. I suggested that my friend should write about how Obamacare helped his business. It would be a nice counter-narrative to some of the Chicken Little rhetoric that is currently in favor!

Joe


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