A reader who heads an investment group came across this disclosure in a prospectus issued in connection with the recapitalization of a family-oriented restaurant chain. This isn’t a political statement, it is a legally-mandated disclosure to prospective investors, which renders the issuer liable if it isn’t true:
Although [XXX] already offers health care, there is expected to be an increase in costs associated with the affordable health care act (“ACA,” see “Risks” section). To mitigate this cost, employees that were working more than 30 hours per week, but less than 33, have moved down to 29 hours per week, reducing the “full time” pool requiring health insurance from 1100 to 835 employees. Those full time employees will be offered health care insurance through the Company’s program or may obtain it through the state Exchanges or expanded Medicaid programs. The Company cannot estimate the number of enrollees in the future program but based on several discussions with Health Insurance Agencies and the experience of restaurants in other states instituting mandatory health insurance, many are expected to turn it down or seek other publicly funded options. According to an NFP study of the Company’s health insurance and potential impact of the ACA, the total cost increase to the Company in 2014 is estimated to be $400,000 (or a 33% cost increase) which we have factored into our Projections. We believe this cost will continue to increase as the ACA is modified over the next several years but that most of the impact can be managed through cost reducing the plan or offset through menu price increases. Management does not agree with some in the industry that want to make a political statement by adding a line item to every check. Given their broad menu and ability to control portions, we believe the company has substantial control to raise prices at a time when everyone else in the industry will also try to raise prices or somehow otherwise improve margins.
Fewer full-time jobs, rising health care costs and higher restaurant prices. Anyone who couldn’t see that coming shouldn’t be allowed to vote.
This next item is closely related. Everyone knows that one of the purposes of Obamacare is to prohibit self-insurance, but it is less widely recognized that one of the program’s key goals is to move toward the abolition of health insurance, period. Greg Mankiw asks, “What is the purpose of insurance?”
A friend points me to this passage:
At a White House briefing Tuesday, Health and Human Services Secretary Kathleen Sebelius said some of what passes for health insurance today is so skimpy it can’t be compared to the comprehensive coverage available under the law. “Some of these folks have very high catastrophic plans that don’t pay for anything unless you get hit by a bus,” she said. “They’re really mortgage protection, not health insurance.”
I have the same problem with my other insurance policies. My homeowner insurance doesn’t cover the cost when my gutters need cleaning, and my car insurance doesn’t cover the cost when I need to fill the tank with gas. Instead, the policies cover only catastrophic events, like my house burning down or a major accident. Now that the Obama administration has fixed the health insurance system, I trust they will soon move on to solve these other problems.
Good Lord, let’s not give them any ideas!
UPDATE: Today’s Michael Ramirez cartoon fits, too: