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PBS Newshour Gets It All Wrong on Kentucky Obamacare Foe

October 26, 2014

PBS Newshour on Friday ran a segment examining the impact of the Affordable Care Act in the hard-fought Kentucky race. As well they should: incumbent Republican Mitch McConnell wants to take away health insurance "root and branch" from 520,000 of his Blue Grass State constituents, coverage through the state's popular Kynect program that Democrat Alison Lundergan Grimes wants to protect. But in turning to small business owner Charles Howard as someone supposedly harmed by Obamacare, Newshour seems to have gotten the facts completely wrong. As it turns out, not only does the ACA's not-yet-implemented employer mandate not affect his six person company, Obamacare already provides small business subsidies that probably could save Howard Metal Sales money.
Unfortunately, the Newshour report by correspondent Renee Shaw of Kentucky Educational Television accepts at face value Mr. Howard's claim that higher premiums for one employee are all the fault of Obamacare:

Howard says a big part of the job equation for him is the cost of health care. As an example, he says the bill to insure just one of his employees, a 51-year-old man, has increased $125 a month, and he blames Obamacare.
"Well, wages are going up for me because if he went from $300 two years ago to $425, they haven't went up in his check, but they have went up out of our payroll, out of our expenses. So how do you give someone a price increase or a wage increase, I should say, when you're having to be hit with those increases in insurance that he needs?"

But with Obamacare's "employer responsibility" provision not yet enforced, in all likelihood the $125, two-year jump in premiums for Howard's worker is due to the fact the man turned 50 since 2012. (Many Americans who purchase their own health coverage are familiar with the pre-Obamacare "birthday gift" their insurer sent them when they hit the half-century mark.)
As it turns out, this isn't the first time Charles Howard blamed Obamacare for higher health care costs before the ACA even took effect. Back on November 19, 2010, the editorial board of the Times-Tribune of Corbin, Kentucky used Charles Howard as the poster child for why Republicans needed to take decisive action to undo the Affordable Care Act:

Nelson County's Charles Howard and his wife mortgaged their home 26 years ago in order to build a 1,236-foot square hardware store. Howard's business and thousands of small businesses -- less than 10 employees -- depend on real action, not symbolism.
His company, Howard's Metal Sales, located in Chaplin, used to employ six. Now it's five. Laying off employees is not "symbolic"...
The $10,000 increase in health-insurance premiums staring him in the face for the next year is Howard's first contact with "Obamacare." It's not a symbolic tab. It's a very real 38-percent increase.
"Who can stand that?" Howard said. "What kind of company can stand that? Nothing else has gone up 38 percent in the past year that I've thought of."

But in 2010, those premiums increases had nothing to do with Obamacare, most provisions of which would not begin until January 1, 2014. On the contrary, as Matthew Yglesias explained in 2012, the Affordable Care Act's new incentives launched in the fall of 2010 were a great deal for small business owners:

The bill in fact contains substantial benefits (some might even say giveaways) for small businesses. That starts with a program already under way to offer special subsidies to firms with fewer than 25 employees that want to offer health benefits. As long as your employees earn less than $50,000 on average (law firms, medical practices, and other elite professional partnership are thus ineligible), you can get a tax credit to defray 35 percent of the cost of the insurance if you're a for-profit firm, and 25 percent if you're a nonprofit. When the law really gets rolling in 2014, those subsidies rise to 50 percent for for-profits and 35 percent for nonprofits.

As I previously documented, by early 2011 insurers were already seeing a flood of new customers from small business owners taking advantage of Obamacare's enticing subsidies. As the Los Angeles Times reported just one month after the Times-Tribune's story of Charles Howard's woe, "Now some insurers are reporting significant jumps in coverage":

In the six months after the law was signed in March, UnitedHealth Group Inc., the country's largest insurer, added 75,000 new customers who work for companies with fewer than 50 employees. The Minnesota company called the increase notable but declined to reveal further details.
Coventry Health Care Inc., an insurer in Maryland that focuses on small businesses, signed contracts to cover 115,000 new workers in the first nine months of this year, an 8% jump.
In California, Warner Pacific Insurance Services in Westlake Village, a major servicer of insurance brokers, has seen business grow more than 10% this year, a company executive said.
And Blue Cross Blue Shield of Kansas City, the largest insurer in the Kansas City, Mo., area, is reporting a 58% jump in the number of small businesses buying insurance since April, the first full month after the legislation was signed into law."

Now, Charles Howard has every right to dislike Obamacare and to declare, "I was born and raised a Democrat. I'm not now." He might believe it is not the government's role to enable millions of Americans to obtain health insurance. He may well believe the Affordable Care Act--and Barack Obama himself--is an affront to "freedom." (Judging by Charles Howard's Facebook page, it listing of Ted Nugent as one of his "inspirational people" and its link to "Obamacare the Game," that's probably a safe bet.) Maybe Howard doesn't have a policy for his business, but gives his workers money to buy their own. But unless I'm missing something from the PBS Newshour report, Charles Howard cannot blame Obamacare for the higher insurance costs he's encountered for a mandate he's exempted from and which, in any case, hasn't gone into effect yet. But then again, KET's Renee Shaw didn't ask any questions on that point: if she did, PBS didn't air them. And that kind of journalism isn't healthy for Kentucky voters about to decide the fate of health care for 12 percent of the entire state's population,
(For the story of another Republican routinely cited by the media as a small business voice on everything from the minimum wage, Obamacare, a millionaire's tax and the estate tax to unemployment benefits and just about anything Democrats advocate, see "Meet Joe Olivo, GOP Poster Child for Everything.")


Jon Perr
Jon Perr is a technology marketing consultant and product strategist who writes about American politics and public policy.

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