One Bad Effect of PPACA/Obamacare

I’m fortunate to have good health insurance. Having lived for a few years without any, I’m not oblivious to that. I’m particularly grateful at the moment, since I got a piece of dead bug exoskeleton stuck to my eye Saturday* that I could not flush off,  resulting in a scratched cornea and a trip to the emergency room. And today I’m going to my doctor because the eye is swollen and painful. Without health insurance, I’d be facing either a whopping bill for my emergency room or perhaps facing the prospect of permanent eye injury.

That’s why I had a hard time arguing against PPACA, despite my dislike of the legislation. I’m among the least likely to be affected one way or the other by it, and there’s a certain level at which privilege arguing against help for others sticks in my throat.

But one bad effect of it has just come to my attention, and it’s worth noting as one of those inevitable side-effects of any government policy that starry-eyed advocates always want to pretend can’t and don’t occur. Their proposal has a good purpose, after all, so of course it does no harm to anyone. Or so we always hope.

Adjunct instructors in academia will lose income next year because of the bill. It was announced at our college last week, that to avoid having to buy health insurance for adjuncts, they would be cut back to a maximum of 8 hours (2 courses).This means one of our adjuncts, who has taught 12 credit hours a term for us for the past two years, will have his paycheck from my college cut by 1/3 next year. That’s assuming we can keep him, since he could very well decide his commute is no longer worthwhile (and adjuncts who are Ph.D. candidates with a JD from a top 10 law school are not easy to find, especially in a rural location like ours).

It’s not just us. I was speaking this weekend with someone who adjuncts at a private career-oriented college (a century old one, not some new fly-by-night operation), and they were also told they’d have to cut back. According to her, a full-time adjunct earns around $18,000, and it was going to cost about $15,000 per to insure them.

These schools just don’t have that much extra money (and getting it would require yet more tuition inflation). It’s doubtful public schools, whether community colleges or universities, will be able to do so, either, since their budgeting and tuition is constrained, at least in part, by state legislatures.

Rumor also has it (although I can’t vouch for this), that PPACA rules constrain people from working two 1/2 time jobs in the same industry as a way of getting around this. If so, that means they won’t be able to pick up the extra courses elsewhere. There’s a certain reasonableness to this rule, else college X and college Y could just arrange to do some adjunct swapping to avoid the effect of the rule. But limiting work-arounds doesn’t mean the affected entities will simply buck up and produce the outcome the rulemakers really want.

That last part is probably the hardest lesson for advocates to figure out. People don’t simply comply with rules to produce your desired outcome, but always look for a way to produce the outcome most amenable to themselves.

PPACA is a godawful mess. The big question is whether the pressure for change caused by its godawfulness will result in repeal, a reform that screws things up even more, or full-fledged single-payer. I know lots of liberals who are hoping for the latter, and thinking it’s part of a clever long-game on Obama’s part, but given the market size and political power of health insurance firms in the U.S., I’m skeptical.

_________________________
*My wife has, of course, taken to calling me bug eyes.

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About James Hanley

James Hanley is Associate Professor of Political Science at Adrian College and a Fellow of the Institute for Social Policy and Understanding. The views expressed here do not reflect the views of either organization.
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18 Responses to One Bad Effect of PPACA/Obamacare

  1. pierrecorneille says:

    I’ve never really understood some liberals’ argument that the ACA would somehow result in insurance companies throwing up their (figurative, anthropomorphized) arms and clamor for a public option or single payer.

    The bad effects you mention for adjuncts are something that supporters of the ACA, like me, ought to acknowledge, and its part of the other reports of other types of employers limiting full-time employment. I’m mildly optimistic that a fourth way is possible: a reform that might make things a little better (e.g., by rearranging the incentives, or narrowing the margin along which enterprises make hiring decisions). What that would look like is a mystery to me, however.

  2. ktward says:

    Lordy, ACA really is a mess. But ACA, as passed, is not exactly what liberals or Dem lawmakers envisioned. It ended up a mess largely because of some [confounding!] concessions that were made all in the name of crafting some kind of legislation that could pass. Painful slog, that.

    2014 is, of course, the magic year when state insurance exchanges are ostensibly up and running. How smoothly (or horrifically unsmoothly) that works out will no doubt vary state to state, but it’s hard to imagine it’s not going to be messy pretty much everywhere, at least to start with. (Except for MA, maybe. After all, they got a head start.) Handy info: http://healthreform.kff.org/tags/exchanges.aspx

    Adjuncts have often held precarious footing when it comes to employee classification; some adjuncts carry f/t+ teaching loads but, because they’re adjuncts, they’re classified as p/t with respect to benies. ACA simply ensures that adjuncts are properly classified according to their work hours. But I think it’s been a serious challenge for DHHS (or maybe it’s the IRS) to craft a formula that fairly translates credit hours into working hours.

    That said, there’s a handful of intertwined reasons why higher education is taking it on the chin, and ACA is only one of them. But imo, higher ed has way bigger problems than ACA — problems that demand our attention — and ultimately ACA is helping way more folks than it’s potentially harming.

    Fwiw, I was a big fan of the Public Option precisely because I believed the PO could prove a useful stepping stone toward single-payer. (Evidently a lot of folks who were not fans of single-payer agreed, which is more or less why it died such a quick death.) But without the PO, ACA is just a law that needs fixing. I’m with you, I don’t see any stepping stone potential. I mean, I’d love nothing more than to have Obama’s secret jedi mojo prove me wrong, but I don’t see it happening. Too much sweat and treasure will ultimately be invested in ACA.

    (Oh! Look what I just ran across. Very informative. I don’t see any mention about the no-teaching-at-more-than-one-college rumor, which seems to me would be a huge issue for adjuncts since they frequently do teach at multiple institutions. http://chronicle.com/article/Colleges-Curb-Adjuncts-Hours/138653/ )

  3. Troublesome Frog says:

    I’ll just say what I always say about the more detailed effects of the PPACA: Whatever the legislation was, if it established something that could potentially break the back of the employer provided health care system, I’d support it. The preexisting condition / insurance exchange scheme was close enough, so I’m behind it until it proves not to work. I don’t believe that anything will save us until our employer-provided system is dead and buried.

    A 100% nationalized system with honest to God death panels or a 100% private system with doctors only accepting gold coins with Glenn Beck’s face on them would probably both reach an equilibrium not much more perverse than our current system, so why not give anything else a shot?

  4. Trumwill says:

    This is what puzzles me. The whole full/part time thing could be seen from a mile away. It was already an issue before this, with regard to benefits. Is it really not possible to force employers to have to cough up for part-time employees? Not the whole amount, but something commensurate with hours worked rather than having the hard line between full and part time? It wouldn’t buy a full policy, but it can help and wouldn’t have the screwy incentives in place now.

  5. lancifer666 says:

    How about I pay for mine and you pay for yours? Or is that just OK for everything except health care?

    And if it’s not OK for health care why is it OK for everything else?

    And just in case you were going to reply with some self-righteous “You got yours so screw everybody else” reply, I don’t have health insurance because I can’t afford it. I am exposed if I get a catastrophic illness because I do have equity in my home.

    But if I get sick and lose my house, well I was the one that got sick and who the hell else should pay for it?

    I “pay as I go” and so far so good. Nobody is “subsidizing” me thank you, so any talk of a “free ride” is horse shit.

  6. pierrecorneille says:

    Lancifer,

    We’re probably never going to agree, but here are my reasons. My starting assumption is that in a society, there ought to be a floor below which people ought not be allowed to fall unless they really really want to. Basic health care is one of those floors. And I also believe that as improvements are made and as society gets wealthier and can afford more things and amenities, then the floor ought to rise proportionately.

    I realize that when I say “society” or “basic health care,” I am invoking contestable concepts and slippery language (why not posit that “society” is delimited by the family, or the city, or the state, or the nation, or the world?) I also realize that a lot of very bad things are done in the name of “society” or in the name of helping others. Also, I am disturbed by the mandatory purchase requirement–not as disturbed as some are–and that of course runs against my admission that someone can fall below the floor if “they really really want to.”

    In other words, my “reasons” are more like starting assumptions and not arguments that will convince someone who doesn’t already agree with me. My one caveat–and maybe this is some type of fallacy I’m indulging in–is that a lot of us live as if we believe in a floor below which people ought not to fall. Even if I’m right on that claim, that doesn’t mean you have to buy into my further claims that the floor includes subsidized health care.

    I will suggest–and you’ve probably got an answer for this–that there are probably things in this life you enjoy or use that are heavily subsidized by others (even if you pay your share through taxes), so I’m not so sure this is an issue where we’re talking about health care vs. everything else. Lest I stray too far into tu quoque territory, I guess I should admit that you largely had no choice in the matter of whether you use/enjoy such subsidized services.

    As for each person paying for their own. I actually have a lot more sympathy for that view than you might think. The idea about making most health care provision part of the market, but providing coverage for uninsurables who have preexisting conditions, etc., has a lot of appeal to me. But what I don’t like about the pre-ACA system (which admittedly wasn’t a free market either) was that one could purchase insurance and yet in practice find that they still aren’t covered. The post-ACA system, at least in theory, would help alleviate that. There are of course real questions about whether the ACA will accomplish much of anything its supporters want it to, and what price it will exact in doing so.

  7. pierrecorneille says:

    “Rumor also has it (although I can’t vouch for this), that PPACA rules constrain people from working two 1/2 time jobs in the same industry as a way of getting around this. ”

    If this is true–and for all I know it might be–it’s probably designed to prevent two employers from colluding to get between them full time work out of part-time labor. I do wonder if it’s enforceable in the way that you fear, however. If I’m an employer in one industry and take on a part-time worker, why should I be held responsible for what my part-time worker does the rest of the time unless I’m actively colluding to avoid paying benefits? In other words, if that’s the policy, it strikes me as a very bad policy. I wonder if this problem can be gotten around by making adjuncts independent contractors. Not that that’d be a good way to go about fixing the policy, but I wouldn’t put it past the universities to try it.

  8. James Hanley says:

    Welcome Will and KT.

    Two quick notes:

    1) I agree adjuncts occupy a pretty crappy position. And while I’m fairly unsympathetic with the amount of complaining about their lot seen in such places as the Chronicle (because, frankly, nobody owes them a job just because they got a Ph.D.), my departmental colleague and I make it a point to treat our adjuncts well, in part because we’re both reasonably decent fellows and in part because it rebounds to our benefit. But in a ham-handed attempt to make the lot of part-time employees better (in all industries, not just ours), the government actually managed to make the lot of many of them even worse.

    2) I’m not claiming this downside by itself makes ACA a net-negative policy. One bad element, anecdotally presented, is not determinative of overall value. My real target is not PPACA itself, but those who commit the nirvana fallacy when they plump for government action.

  9. Jennifer says:

    The “employer buys your health insurance, not you” angle is likely the single most dysfunctional aspect of our healthcare system, and Obamacare only makes that worse. Imagine if all of life’s other necessities operated that way: “Sucks that you lost your job and your income but, adding insult to injury, your rent, utility and grocery costs are now ten times higher than they were when you were employed.”

  10. James Hanley says:

    Jennifer (welcome back, feral genius, we haven’t frequented each other’s blogs enough recently),

    And that’s often used as a criticism of the market, even though it was actually a joint corporation/labor union response to, iirc, federal rules limiting financial compensation. Limit how much I can pay someone, and I’ll just provide them with lots of non-monetary benefits, like cars, child care, housing, education, oh, and, yeah, health insurance. The fungibility of money makes all policy attempts to limit these things very difficult, so we so often end up with perverse results.

  11. Michael Drew says:

    The flip side is to be sure not to insist that people arguing during debate over whether to enact a policy that it will be net-positive is committing the nirvana fallacy just because their bottom line is that they’re for it.

  12. Michael Drew says:

    are committing

  13. lancifer666 says:

    pierrecorneille,

    I appreciate your well reasoned opinions and especially the thoughtful way you presented them. I actually do think that we could come to agreement, or at least a working compromise.

    My starting assumption is that in a society, there ought to be a floor below which people ought not be allowed to fall unless they really really want to. Basic health care is one of those floors. And I also believe that as improvements are made and as society gets wealthier and can afford more things and amenities, then the floor ought to rise proportionately.

    This is certainly a compassionate “starting point” that I believe most people, including me, would accept in theory. Unfortunately the way to achieve it is certainly not as easy to agree upon.

    As for each person paying for their own. I actually have a lot more sympathy for that view than you might think. The idea about making most health care provision part of the market, but providing coverage for uninsurables who have preexisting conditions, etc., has a lot of appeal to me.

    Medicaid and Medicare were designed for this purpose but these programs have become huge bureaucratic institutions with ever increasing budgets and yet the cost for health care outside of these programs continues to skyrocket. I don’t have confidence that yet another layer of taxpayer funded health care bureaucracy is going to make things any better.

    In fact I’m pessimistically certain that it will make things worse.

    All in the name of compassion and efficiency.

  14. Dr X says:

    Actually, the cost of health care has leveled, I believe over the last three years. At this point, it isn’t clear why. The economic downturn could be a factor, but it’s also possible that some of the efficiencies in preparation for implementation of ACA are having an effect. Whatever the reason and contrary to expectations, health care cost has leveled off.

  15. pierrecorneille says:

    Lancifer,

    You very well may be proven right.

  16. Troublesome Frog says:

    Dr. X,

    I haven’t looked too hard at the data on this one, but one possibility is simply Herb Stein’s law in action: If something cannot go on forever, it will stop. At infinity, health care costs absorb 100% of our output. That obviously doesn’t make sense, so it follows that some phenomenon will cause it to level off before that. It’s possible that we’re just approaching that maximum.

    One can hope, anyway.

  17. lancifer666 says:

    Hi Dr X,

    I haven’t looked in the last six months or so but the last numbers I saw showed health care costs increasing at a much higher rate than inflation.

    What numbers are you basing your statements on?

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