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Obamacare: Even the Good News Is Bad


Obamacare will cost some restaurant chains much less than they predicted—in the case of Wendy’s, about 80 percent less than its original estimate. But dig a little deeper and you see how this is not an unqualified boon. Wendy’s and other companies will enjoy these savings because more workers than originally expected may choose to opt out of coverage. WSJ:

They say many employees will decline company-offered insurance, either because they can get insurance through Medicaid or a family member, or because they prefer to pay the penalty for not having health insurance. The penalty next year will be as low as $95, much less than most employees will be asked to pay through company-sponsored insurance plans.

What’s good for these companies is bad for the ACA, which would be severely undermined if young people exit the insurance rolls en masse. As we’ve noted before, there’s nothing stopping the young and healthy from paying the penalty instead of the premiums and waiting until they’ve incurred serious medical costs to jump into the insurance market. Remember that under Obamacare pre-existing conditions don’t disqualify you from coverage. As older people and those with greater need for services increasingly dominate insurance pools, premiums will rise.

You know Obamacare is trouble when even the good news is bad.

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