The Intersection of Income Inequality and Obamacare

If you work for the government, work for a large corporation, or are on Medicare, Obamacare does not impact you very much.  If you work for a living at a place that does not offer healthcare benefits, Obamacare is center-stage in your life. Obamacare was supposed to help these people. It has not. Obamacare was supposed to bring the cost of healthcare down. It has not. Obamacare was supposed to allow people to keep their doctors and their health plans: “If you like them, you can keep them.” It has not.

Obamacare was the theme of the 2008 hope and change campaign. Now we are getting ready for the 2016 election cycle and the Democrats’ campaign theme has already been laid out by the three potential Party nominees: income inequality.

President Obama started the income inequality discussion back in 2008 and has dropped the phrase a few times since, but he has not done anything about it. Now Senator Sanders has made it the Democrat Party platform and Secretary Clinton and Governor O’Malley have joined Senator Sanders in taking up the cause.

The thing is, Obamacare is one of the causes of income inequality. With all the good intentions that Obamacare started with, it has resulted in the cost of health care being more expensive; and out of reach for the little guy. Yes, if you do not make a lot of money you can get a government subsidy to help you purchase health care, but it is not enough. Many Americans cannot afford the health care premiums even with government subsidies. If you do not qualify for a subsidy you are now paying at least 50% more than you used to and your out-of-pocket deductible has tripled.  Health care for my wife and me this year will cost about $20K. Before Obamacare it was $6K. But, I am fortunate enough to be able to afford it. Many people cannot.

Obamacare cannot be fixed. It has a flawed structure. The structure of health care in America is broken. Tweaking this broken system will do nothing but prolong our pain.

I am a conservative – not a socialist. But, I believe we need socialized health care just as we need social security. If you are one of the lucky people that work for the government or work for a large “self-insured” employer that does not have to meet all the Obamacare requirements, you rightly should disagree with me. My proposed solution will disrupt your high-quality health care benefits for which you pay pennies on the dollar (your employer is picking up most of the tab). I know people are complaining about companies forcing them to pay more of the share – the complainers know nothing of the self-insured’s nightmare. Members of Congress know even less.

Our society has gone too far down the greed path. Yes, I am a conservative and I am stating that we need regulation to protect our society from greed. Regulation is not a dirty word. In fact, dirt is one of the things we regulate so that greed does not cause us to pollute the air we breathe. I think that is a good thing. If you disagree, go live in an industrial area in China for a month. When you come back, let me know if you still disagree.

Many workers toil a long work week but do not get paid enough to rise above poverty. They do not receive health care benefits and they cannot afford to purchase it on their own. And, if they do not purchase it, the government levies a tax on them. That cannot be America. It is not the America I want.

Big companies provide good wages and health care benefits to their employees. But, for the work they consider not to be their “core competency” they outsource. They hire a subcontractor based on the lowest bid. That lowest bid is based on a low wage and no benefits: no paid sick pay, no paid vacation, no retirement plan, and no health care. These are all jobs that large corporations used to do with their own employees: cleaning, landscaping, security, answering the phone, technical support, and on and on. They are middle class jobs that no longer provide a middle class income and benefits. Some of them are now done in India. Fortunately, cleaning and landscaping cannot be performed remotely.

Greed has led to rampant bad outsourcing. Outsourcing would not be bad if the company doing the outsourcing required the subcontractor to provide a living wage and the same level benefits that the company provides to its direct employees. I do not blame companies for bad outsourcing. If company A can save money by outsourcing, then company B has to do the same to remain competitive. That is why you need regulation. So all companies are forced to compete on a level playing field. It is the same principal for regulating clean air. Without regulation, even good companies have to engage in socially harmful practices just to be able to compete.

Many jobs that cannot be outsourced have been reduced to part-time jobs. Obamacare does not require an employer to provide health care benefits to workers that work less than 29 hours per week. 

When I look at the two issues of health care and income inequality I see a solution. A socialistic solution. We need to have socialized healthcare that provides very basic health care – not the Cadillac health plan, the VW beetle health plan (not a diesel).  This socialized health care should be paid for through a flat employee payroll tax that everyone pays on income above $36K for an individual ($36K is a placeholder for the actuaries to amend as needed). If you can afford it, you can purchase add-on health care benefits in the free market. Your high-cost plan would eliminate the wait time at the local clinic that most Americans will get under my socialized health care. My socialized health care plan would have the death panel that sounded so horrible during the Obamacare battle. Yes, we need to make the basic health care something that we can afford. That is what “Affordable” is supposed to mean. I am talking about the bare-bones minimum health care that is required to sustain human dignity. Affordable enough to provide it to all.

All the subcontracted employees would have the same benefits as those that are lucky enough to receive their paycheck from the large corporation. Even members of Congress would be on the same plan. This is a proposal to regulate greed (then again, aren't all regulations?). It is wealth redistribution and I believe it is American. As a subcontractor I was once surprised and impressed by a catholic university that sent me an RFP (request for proposal) requiring the bids to include the cost of healthcare. Surprise is a mild term, I was shocked. I have only seen it occur that one time. That was an example of good outsourcing. Unfortunately it was the only example.

I know that someone will say: why don’t those subcontracted employees just go to night school, get a college education and get a good job with benefits at a large corporation? I agree, people should do all they can to make a better living. But, when they get a seat in the corner office, someone is still going to come in their office after hours and clean the place. Shouldn’t that person have basic health care?

Obamacare is broken. We can fix it and get a bonus of leveling the field for the working poor. Senator Sanders, go for it. To those Republicans that I have angered with this discussion, think about it. It could do wonders for your image. While you are at it, think about the minimum wage too.