8/03/2013

Some coming Obamacare regulations and their costs

Health care regulations.
. . . Menu labels [expected in September]
The Food and Drug Administration is finalizing rules requiring that calorie information be posted on menus at chain restaurants and fast food joints, as well as on vending machines.

The new requirements . . . would require that calorie counts be visible on restaurant menus and on signs near vending machines. 

Restaurants with 20 or more locations operating under the same name and selling the same items will be covered by the regulations. . . . 
Home care workers
People who help the elderly and patients with disabilities manage their daily lives will be entitled to a minimum wage salary and overtime pay under a long-delayed rule expected from the Labor Department.

The effort to extend benefits to the nation’s nearly 2.5 million in-home healthcare aides . . .

The expected rule would close a loophole in federal labor laws that exempted babysitters and people who spend time with their elderly neighbors from wage requirements. At the time the laws were written, the home care industry didn’t exist. . . .

The regulation was scheduled to be issued in July but has not yet been finished. . . .
These services are very labor intense  and this change will do to things: 1) Reduce the amount of services given to the elderly and patients with disabilities (doesn't the Obama administration care about them?) and 2) raise the costs of these services generally.  Some workers are going to get higher wages, but they were willing to work for less.  Economists are happy to explain why market equilibriums maximize total wealth.  In addition, the competition to get this extra pay (what economists call rent seeking) will reduce the actual benefits that even these lucky workers receive.
ObamaCare penalty
The Internal Revenue Service (IRS) is gearing up to finalize its rules for the penalty that will be charged to people who do not carry health insurance.

Under the Affordable Care Act, people without health insurance who do not qualify for an exemption will be charged a penalty.

The agency proposed in January to set that penalty as either a flat amount of $95 per year or 1 percent of household income, though the amount will rise in future years. 

The penalty will go into effect starting in 2014. . . .
As I explained in my book, At the Brink, even this penalty will not be collected.  The IRS is explicitly forbidden from using its normal tools to collect money.

Here are more unintended consequences of Obamacare regulations.  Sen. Susan Collins (R-Maine) made the problems with some parts of the law very clear here:
. . . “ObamaCare is actually discouraging small businesses from creating jobs and hiring new employees,” Collins said. “The law also has perverse incentives for employers to reduce the number of hours that their employees can work.” . . .

“If you employ 49 workers, there are no fines,” she said. “But, if you add just one more employee, you’re hit with penalties. These enormous penalties are a real threat to employers who want to add jobs. They are a powerful incentive for employers to refrain from hiring additional workers.” . . .

“Even worse, under Obamacare, anyone working an average of just 30 hours a week is considered full-time,” she said. “This will only cause some businesses to reluctantly reduce the hours of their workers to fewer than 30 hours per week.”

“Under this troubling trend, more workers will find their hours and their earnings reduced,” she added. “Jobs will be lost. This is especially disturbing as our country is still battling high unemployment.” . . .

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