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How Obamacare Punishes Small Business Owners, Job Seekers, Young People

Democrats have echoed the same rhetoric on health care for the last five years: Republicans want to prevent Americans from affordable health insurance. After all, Democrats point out, they have voted to repeal the Affordable Care Act 40 times.

Last Friday was no different, as President Obama at a White House press conference slammed the GOP for their continued effort to repeal his signature health care legislation: “The one unifying principle in the Republican Party at the moment is making sure that 30 million people don’t have health care.”

“The notion is simply that those 30 million people, or the 150 million who are benefiting from other aspects of affordable care, will be better off without it,” he continued. “That’s their assertion. Not backed by fact. Not backed by any evidence. It’s just become an ideological fixation.”

Whether those 30 million people will actually benefit from Obamacare remains to be seen. Many of those uninsured are young people who will be forced to pay high premiums for coverage they don’t need, as the law mandates minimum levels of coverage and doesn’t offer cheap plans meant for those in their 20s and 30s (ones with low monthly payments and high deductibles for emergencies).

The Left’s argument also falls short when considering the havoc the law will wreak on the nation’s economy, its small businesses, people struggling to find full-time jobs, and so on.

In effect, let’s turn Obama’s statement around: “The one unifying principle in the Democratic Party at the moment is making sure that millions of small businesses, people with part-time jobs, and young people suffer economically.”

Here are the stats behind that statement:

Along with a 7.4 percent unemployment rate and the labor force participation rate nearing its lowest point since the 1980s at 63.4 percent, we have an exceptionally high underemployment rate of 14 percent, according to the Bureau of Labor Statistics.

The underemployment rate measures the level of utilization of the labor force, factoring in individuals who are forced to work part-time and those who have the education and skills beyond the qualifications necessary for their job.

As of July of this year, the bureau found that 8.2 million people are involuntarily working part time. They want full time jobs, but there’s none to be had. This number is exceptionally high, despite a slight trajectory downward since the passage of Obamacare. Do not expect this trend to continue as 2015 nears, because as that year rolls around, so does the law’s employer mandate.

If an employer with 50 or more full-time employees does not offer health coverage, and at least one employee qualifies for a health-tax credit, the employer must pay an additional non-deductible tax of $2,000 for all full-time employees. If any employee actually receives coverage through the exchange, the penalty on the employer for that employee jumps to $3,000.

Since the penalty does not apply if part-time employees are not offered coverage, the law is essentially an invitation for small businesses to hire people part-time instead of full time. 

Americans looking for work will struggle to find a job where they can work 40 hours a week. Others already working full-time may either be laid off or have their hours cut so the employers can fall below the 50-person minimum to avoid paying the penalty.

As for those businesses that are not big enough to encounter the employer mandate, owners and workers can still be hit with the individual mandate, which forces people to buy expensive state-level insurance.

The economy is in a sluggish state as it is. We can point the finger at both parties for this, but the reality is this year has seen the highest levels of poverty since the 1960s, with 50 million – or one in six Americans – living below the income line that defines poverty.

As long as the mandate remains intact, we will see a spike of underemployment, and possibly even unemployment as employers try to avoid the penalty.

Congressional Republicans are not a group of sadists. Their problem isn’t with insuring the uninsured, but rather with the method health care is being implemented. The Affordable Care Act was passed completely on party lines.  The constituents spoke at the polls in 2010, and the Senate might be wise to finally listen.

Fix contributor Michael Cipriano is a student at American University.

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