REMEMBER, PEOPLE: There is no bad news!
The Wall Street Journal editorializes today on Wal-Mart’s announcement last week that, due to skyrocketing health care costs, the company will cut health benefits for many part-time employees. The WSJ castigates the retailer for its past political cover for Obamacare, and notes with dark foreboding what this portends for the future of employer-provided health insurance.
Quoth the Journalistas (subscription needed):
The larger danger is what happens when the new law’s subsidized insurance exchanges become operational in 2014 and scramble the labor market. The Obama plan exposes businesses to “pay or play” penalties that are supposed to keep the employer market from unraveling and that Wal-Mart supported in part to shackle its smaller competitors. But once the regulations are finalized, many businesses may look rationally at the new incentives and conclude that shedding their health costs and paying the penalties is cheaper than the status quo.
This will be especially true in industries with large numbers of low-wage, low-skill workers—like hotels, restaurants and, yes, retail—so Wal-Mart’s benefit drawdown is especially worrisome if it is a prelude to a taxpayer hand-off.