The ancient Greeks (or maybe it was Oscar Wilde) said that when the gods want to punish you, they answer your prayers. Getting what you asked for can turn out to be deeply problematic, as the supporters of Obamacare on the Harvard University faculty are discovering. As the New York Times reports,
For years, Harvard’s experts on health economics and policy have advised presidents and Congress on how to provide health benefits to the nation at a reasonable cost. But those remedies will now be applied to the Harvard faculty, and the professors are in an uproar.
Members of the Faculty of Arts and Sciences, the heart of the 378-year-old university, voted overwhelmingly in November to oppose changes that would require them and thousands of other Harvard employees to pay more for health care. The university says the increases are in part a result of the Obama administration’s Affordable Care Act, which many Harvard professors championed.
A prime example of part of Obamacare that the Harvard professors supported was the so-called Cadillac Tax, an excise tax scheduled to take effect in 2018. The purpose of the Cadillac Tax is to reduce health care usage and costs by encouraging employers to offer plans that are cost-effective and engage employees in sharing in the cost of care. The “incentive” is a 40 percent tax on employers—like Harvard—that provide high-cost health benefits to their employees. Now that the Cadillac Tax is being applied to them, though, the faculty are apoplectic:
Richard F. Thomas, a Harvard professor of classics and one of the world’s leading authorities on Virgil, called the changes “deplorable, deeply regressive, a sign of the corporatization of the university.”
No, professor, it’s a sign of the governmentization of the university. Obamacare is not a corporate program; it’s a government program. Classics professors can’t be expected to be experts in economics, but they shouldn’t be clueless either. Can the Harvard faculty truly be this ignorant about a law they supported.
Mary D. Lewis, a professor who specializes in the history of modern France and has led opposition to the benefit changes, said they were tantamount to a pay cut. “Moreover,” she said, “this pay cut will be timed to come at precisely the moment when you are sick, stressed or facing the challenges of being a new parent.”
Yes, it is tantamount to a pay cut. But that reduces “income inequality” so you’d think progressives would be for it.
Lewis is also right about the effect the cut will have on consumption of healthcare. The “pay cut” (i.e., an increase in the amount paid out of pocket by the employee) comes when people are most likely to consume too much healthcare: when they are sick. When healthcare is paid by third-parties (e.g., insurance companies, employers) people tend to consume more than is needed. So-called Cadillac insurance plans encourage people to consume much more than is needed, that is the very purpose of the Cadillac tax. What did Thomas and Lewis and their peers think the Cadillac tax was for?
The rest of the article is even more depressing, showing that even economics professors at Harvard do not understand Obamacare. For instance, Jerry R. Green, a professor of economics and a former provost who has been on the Harvard faculty for more than four decades, says, “[The new out-of-pocket costs are] equivalent to taxing the sick . . . I don’t think there’s any government in the world that would tax the sick.”
Yes, professor, there is a government that would tax the sick: it’s the one that passed Obamacare. Requiring people to pay more out-of-pocket costs was an essential part of Obamacare’s plan to reduce healthcare costs. How is it that a Harvard economics professor does not know this?
What’s amazing is that even after the new changes the Harvard plan is still much, much more generous than most Americans healthcare plans:
Harvard’s new plan is far more generous than plans sold on public insurance exchanges under the Affordable Care Act. Harvard says its plan pays 91 percent of the cost of services for the covered population, while the most popular plans on the exchanges, known as silver plans, pay 70 percent, on average, reflecting their “actuarial value.”
So the Harvard faculty is going to be better off than anyone on the Obamacare plan and yet they are still whining. Imagine if they had to actually get insurance from the health care exchanges they supported.
In the future, when the Harvard faculty supports a massive government program that will affect millions of Americans they should stop and consider whether the effects might spill over into their Ivory Tower.