December 8, 2021

Today’s ObamaCare triumph: UPS drops coverage for 15,000 spouses

“If you like your doctor, you will be able to keep your doctor. Period. If you like your health care plan, you will be able to keep your health care plan. Period. No one will take it away. No matter what.” – Barack Obama, July 2009

Today’s ObamaCare triumph is the announcement by United Parcel Service that it will drop working spouses from its health care plan, loudly and repeatedly citing the Affordable Care Act as the reason. From Kaiser Health News:

Rising medical costs, “combined with the costs associated with the Affordable Care Act, have made it increasingly difficult to continue providing the same level of health care benefits to our employees at an affordable cost,” UPS said in a memo to employees.

The company told white-collar workers two months ago that 15,000 working spouses eligible for coverage at their own employers would be excluded from the UPS plan in 2014. The Fortune 100 firm expects the move, which applies to non-union U.S. workers only, to save about $60 million a year, said company spokesman Andy McGowan.

UPS becomes one of the highest-profile employers yet to bar working spouses from the company plan. Many firms already require employees to pay a surcharge for working-spouse medical coverage, but some are taking the next step by declining to include them at all, consultants say.

The UPS memo specifically outlines the ways ObamaCare is compelling them to drop coverage:

While acknowledging that overall health spending continues to rise, the company also blamed cost increases on the Affordable Care Act’s research fee (initially $1 per health plan member, then rising to $2) and an a temporary fee of $63 per member to stabilize new online marketplaces for consumers buying directly from insurers.

Other factors are the act’s ban on annual and lifetime coverage limits and its requirement to cover dependent children up to age 26, UPS said. The law’s mandate for individuals to obtain coverage will nudge employees who previously opted out to enroll, also raising costs, the company said.

This could be rough on the affected spouses, who have hopefully forgotten everything Barack Obama ever promised about the Affordable Care Act, not to mention his meaningless vows to avoid raising taxes on the middle class:

The health law requires large employers to cover employees and dependent children but not spouses or domestic partners.

UPS spouses may have difficulty finding similar coverage at their own employers. The $500 in-network family deductible for UPS’s basic plan, for example, is less than the nationwide average of $733, according to the Kaiser Family Foundation.

Although the UPS memo doesn’t mention it, Kaiser brings up the “Cadillac tax,” which is going to sock high-value health care plans with big tax penalties beginning in 2018. It’s possible that unionized workers will be able to keep spouses covered for the time being, since “neither the company nor the Teamsters union would say whether a pending contract for blue-collar workers includes health-coverage changes for working spouses.” But the approach of the Cadillac tax might shake things up for them, too.

Defenders of ObamaCare often argue that its extra costs are relatively modest, implying that the many, many companies dropping or modifying coverage due to the Affordable Care Act are either over-reacting or lying. But it doesn’t take much extra cost to change corporate thinking. (Of course, liberals think millions of dollars in cost are a pittance, because they’re accustomed to Big Government printing up a fresh pile of deficit dollars to cover such trifles.) This is particularly true if corporate planners were already considering certain courses of action.

Liberals sneer that management is just using ObamaCare as an “excuse” for cost-cutting. But it could also be said that the private sector responds to universal burdens differently than individual challenges. If the cost of labor is going up for everyone, then every company starts thinking about cutting hours, eliminating jobs altogether, and reducing benefits. The competitive pressures that might have prevented some managers from implementing these measures on their own have been removed by government fiat. An individual retail operation or restaurant might have been reluctant to inconvenience customers by trimming its staff, but when all of their competitors are also trimming staff, we get a national New Normal of painfully diminished paychecks, higher unemployment, and reduced customer service. And those changes tend to become permanent, as they are digested by the commercial culture.

America will have to change in a lot of unpleasant ways to accommodate ObamaCare – from higher insurance premiums and increased unemployment, to discarding the rule of law. The process is nowhere near complete.