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Last week, news broke that the popular grocery store chain Trader Joe’s will no longer provide health insurance for employees who work fewer than 30 hours per week. When someone sent an email to the company complaining about that decision, Trader Joe’s sent that customer a response explaining its rationale for cutting health insurance benefits. Although it’s carefully and tactfully phrased, the letter, whether inadvertently or on purpose, ends up highlighting that the ObamaCare exchanges are wealth redistribution vehicles, by which middle class people who lose their insurance will end up subsidizing everyone else.
(Read More: Obama Stiffs Big Labor on Obamacare Exemptions.)
According to the Trader Joe’s email, the purpose behind ObamaCare is to provide “low cost options to people who do not make a lot of money.” This means that, by definition, the law is going to have to provide “those people [with] a pretty good deal for insurance … a deal that can’t be matched by us — or any company.”
Unfortunately for employees who like their insurance and want to keep it (as President Obama promised they could), an employee “is only able to receive the tax credit from the [ObamaCare] exchanges under the act if we do not offer them insurance under our company plan.” Trader Joe describes ObamaCare as being a much better detail, and has an example to explain it:
A Crew Member called in the other day and was quite unhappy that she was being dropped from our coverage unless she worked more hours. She is a single mom with one child who makes $18 per hour and works about 25 hours per week. We ran the numbers for her. She currently pays $166.50 per month for her coverage with Trader Joe’s. Because of the tax credits under the ACA [Affordable Healthcare Act] she can go to an exchange and purchase insurance that is almost identical to our plan for $69.59 per month. Accordingly, by going to the exchange she will save $1,175 each year . . . and that is before counting the $500 we will give her in January.
That, of course, is the rosy scenario. The same email concedes that “there are others who will go to the exchange and will be required to pay more. That is usually because they have other income and typically a spouse who had a job with no benefits and they do not qualify for the subsidies under the ACA.” In other words, take away the group that gets subsidized benefits, and you end up with everyone else paying more to fund those subsidies.
Trader Joe gives an example of how the redistribution works: a Crew Member who works 20 years, but has a spouse who was earning $200,000, gets no benefit from ObamaCare (or, as the email tactfully said, “unfortunately for them they are likely to have to pay more because of their real income”).
Nothing is for free. The Trader Joe’s letter, while trying to paint a shiny smile on an intelligent corporate decision, reveals that ObamaCare is nothing more than a disguised wealth distribution scheme that stifles market dynamics.