Deseret Industries provides a simple lesson in economics

Deseret Industries is cutting the number of hours its workers can work because of Obamacare. You can read about it here.

The bottom line is that Obamacare requires companies that employ more than 50 people to provide health care to workers who are employed more than 30 hours a week.

So, instead of providing health care to its workers, DI is cutting the number of hours worked.

This step is completely appropriate and in line with how many companies will deal with Obamacare. Some companies with 60 workers are firing 11 so they can get under the Obamacare mandate, and others are cutting back on the number of full-time workers.

This is exactly what some of us predicted would happen under Obamacare, the single worst piece of legislation passed by Congress in many decades.

Of course the liberal lurkers are mentally decrying the greed of employers, why don’t they care about the workers, etc, etc. Only one problem: DI is a non-profit with the mandate of employing as many people as possible. Nobody at DI is getting rich. DI is taking this step to continue to provide entry-level training and employment to the maximum number of people.

And many of the same principles that apply to DI also apply to for-profit businesses.

Let’s consider some basic numbers.

Let’s say DI’s budget to spend on workers is $100,000 per year.

A person working 40 hours a week making $7.25/hour costs $15k per year.

There are administrative costs, so the number of people employed by DI would be six.

Now, let’s say that DI as an employer must now provide health insurance to its employees. Health insurance generally will cost about $5000 per year per employee, sometimes a lot more, sometimes a little less. Let’s say $5k to be conservative. So, if we add this cost, it is very easy to see that DI can no longer afford to hire six people. With health care costs added in, DI can only hire five people, and even that is stretching it. $15k per year times five equals $75k. Plus $25k in health care costs equals exactly $100k, and this does not take into account any administrative costs.

Forcing DI to provide health care just cost one person a job.

DI’s purpose is to provide the maximum amount of work experience to low skilled workers (many of them refugees) so it simply does not make sense for DI to provide health insurance.

DI’s only reasonable choice was to cut hours so that a maximum number of people could continue to work there.

So, Obamacare just cost DI’s workers money.

Again, this is not a case of some greedy owner taking all the money for himself. This is simply basic economics at a nonprofit.

But as I wrote here, the exact same principle applies to for-profit companies.

The owner of a McDonald’s faces the exact same dilemma as the managers of DI. He has the same theoretical $100k for salary. If health care is mandatory, he must fire workers. If the minimum wages is increased, he must fire workers.

So, expecting business owners (and nonprofit managers) to either raise salaries or provide health care means that fewer people will be hired, and it also means that sometimes companies will make full-time employees part-time employees so they can get around the onerous rules imposed by government.

A reminder: nobody owes you or anybody else a job. A job involves the voluntary exchange of something valuable (your time and talents) for something else of value (money). $7.25 an hour is not a great wage, but nobody is forcing the people at DI or McDonald’s to take the job. They value the employment they are getting for their own personal reasons.

Government rules, regulations and mandates (such as Obamacare) mean that fewer people are employed. The expansion of government rules such as Obamacare is the primary reason the unemployment rate remains stubbornly high.

So, if you truly want to help the poor, help them get a job by decreasing the numbers of rules and mandates. It is the only logical and charitable thing to do.

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About Geoff B.

Geoff B has had three main careers. Some of them have overlapped. After attending Stanford University (class of 1985), he worked in journalism for several years until about 1992, when he took up his second career in telecommunications sales. In 1995, he took up his favorite and third career as father. Soon thereafter, Heavenly Father hit him over the head with a two-by-four (wielded by the Holy Ghost) and he woke up from a long sleep. Since then, he's been learning a lot about the Gospel. He still has a lot to learn. Geoff's held several Church callings: young men's president, high priest group leader, member of the bishopric, stake director of public affairs, media specialist for church public affairs, high councilman. He tries his best in his callings but usually falls short. Geoff has five children and lives in Colorado.

47 thoughts on “Deseret Industries provides a simple lesson in economics

  1. This is actually a Church-wide thing. Many, many students at BYU are being affected by this. Whereas a student could work as a research assistant in their department and teach at the MTC, now the policy is that they can only work for one Church-sponsored organization at a time. So many students are finding their hours cut, or their paychecks halved, or being forced to choose between their two part-time jobs.

    The UVU language department is having trouble, because English teachers spend 15 hours a week teaching an English class. Most teachers were teaching two classes, giving them 30 hours a week for work. Now, however, the policy is that they can only teach one class, giving them only 15 hours of work. That halved their paycheck, and now UVU has to hire many more people to cover the courses as well.

    I have a friend who was paying for his own health insurance through an individual policy, because his part-time job didn’t give him benefits. But now, because of the new policy, his hours have been substantially cut (because his employer couldn’t afford to add benefits to his employment package). And so now, he doesn’t have money to pay his health insurance premiums (and he has been unable to find a second job). So this law has actually cost my friend his insurance. I don’t blame the employer — he doesn’t have the money. He can’t magically make money appear out of nowhere. I blame the politicians who never read an economic text before making substantial tweaks to economic incentives.

    There are many consequences to this. I don’t think the Church’s policy is bad at all — I think it is the rational course of action given the legal constraints they are now under. Money doesn’t grow on trees. They can’t just shell out whatever they want. The Church has resources, but it has to be judicious in how it uses those resources. They are just stuck between a rock and a hard place because of powerful do-gooders who decided that the coercive force of state is the best way to raise people’s lifestyles.

  2. Great post Geoff. The laws of reality are rigid and anytime you screw with them, there are ALWAYS unintended consequences.

  3. Thanks for this. Basic economics are often forgotten in the debate on the fallout of Obamacare. It comes down to this, you have only so much money (capital) as a business owner. The more regulation and rules imposed by the govt, the less you have for your business. DI provides a wonderful service and wonderful job training for so many people. It’s unfortunate that those people will be the ones that suffer the most.

  4. Wouldn’t we become a Zion society if employers cared enough about their employees to find a way to provide health care for them rather than reducing their hours. Consider Malachi’s words, “Then I will draw near to you for judgment. I will be a swift witness against the sorcerers, against the adulterers, against those who swear falsely, against those who oppress the hired worker in his wages, the widow and the fatherless, against those who thrust aside the sojourner, and do not fear me, says the Lord of hosts.” Never in the history of our nation has the gulf between rich and poor been greater. How sad that any organization, especially a church, cares more about the profit margin than providing a living wage or providing critical health care for its employees.

  5. Your post makes it seem like firing one worker is worse than employing 10 with no health care, and giving them wages so low that they can’t afford to buy it themselves.

    Two words would make this all go away: Public Option. We wouldn’t have to play all these convoluted games to get people covered by insurance companies screwed into paying grossly inflated fees to doctors who are held completely unnaccountable for the price of their services, thanks to the non-competitive of insured medicine.

  6. A couple of upsides for D.I. and those working at D.I.:

    1. D.I. can help more people this way. If you’re at all familiar with the D.I., you know that they employ a lot of people who can’t find work anywhere else (not even fast food). Decreasing hours to 30 means an increase in the actual workforce, meaning D.I. can help even more otherwise unemployable people gain valuable work experience and skills.

    2. If states are smart and accept the Medicaid expansion, every individual working minimum wage at D.I. now has healthcare (or at least will as of January 1, 2014). For those living near the poverty line, that’s a huge deal. In fact, chances are that decent private insurance would cost them more than $300/month, which is about what they’re missing out on by working 30 hours instead of 40 hours.

  7. “The owner of a McDonald’s faces the exact same dilemma as the managers of DI. He has the same theoretical $100k for salary.” Why does he have the same $100k for salary? Why can’t he dig into his profits and make up the difference? FWIW, I’m not advocating for Obamacare. But many large companies, and certainly many small to mid-size companies, are very profitable. I presume the expectations from liberals is that companies will be less profitable in order to take care of John Q. Public. Ultimately, I see the Obamacare mandates as a tax my another name. I’m a small businessman, and every time I go to gripe about the price of gas, I ask myself: When’s the last time I lowered my prices for the services I render? “Never.” As costs rise, I simply pass them onto the consumer. Certainly, in the case of non-profits, the cost of Obamacare can’t be passed on. However, with for-profit businesses that are similarly situated, they could all keep their workers, pay the insurance premiums, and pass the cost onto consumers. Their profit margin remains the same either way. What am I missing?

  8. Katie88, it is difficult to write so many logical fallacies and misstatements in so few words, but you have managed to do it. Congratulations?

    1)Zion society. A zion society involves people voluntarily working together to consecrate themselves to God. Government is about force, not voluntarism. If left alone by government, DI would employ more people and fulfill its mission. Because government has forced Obamacare upon us, DI must cut the hours of the people who work there. Government cannot force zion upon us any more than Satan could force us to be good.

    2)Employers caring about their workers. I have explained above that DI is a nonprofit that cares about its workers so much that it hires refugees so they will get work experience. DI was faced with a choice: hire more people (thereby helping more people) or hire fewer people (thereby helping fewer people). The perfectly logical thing to do is to help more people, especially if you are a religious organization.

    3)You are misinterpreting Malachi. The word “oppress” means in this context “defraud.” If you promise somebody $7.25/hour and pay them only $5/hour you are defrauding them and are in judgement by Malachi. If you promise somebody $7.25/hour and pay them $7.25/hour, you are not defrauding them or oppressing them. You are paying them what they agreed to be paid when they took the job.

    4)Katie, I hate to break your liberal bubble, but the Church is a nonprofit and is not making any profit on this deal. So if you want to be sad about anything, you should be sad about the many government regulations that are hurting the poor and truly oppressing them and defrauding them of jobs and a good living. Concentrate your ire on the real source of the oppression: the government.

  9. Nate said:

    “Your post makes it seem like firing one worker is worse than employing 10 with no health care, and giving them wages so low that they can’t afford to buy it themselves.

    Two words would make this all go away: Public Option. We wouldn’t have to play all these convoluted games to get people covered by insurance companies screwed into paying grossly inflated fees to doctors who are held completely unnaccountable for the price of their services, thanks to the non-competitive of insured medicine.”

    Nate, your math is off. First of all, I don’t know how many people DI employs so my example is a hypothetical. DI probably employs hundreds of people, certainly much more than 50. So, in my hypothetical DI had a choice of hiring a lot fewer people, probably at least 10 to 20, or to fire people to provide health care. There were no other choices. What would you say to the people who were fired, especially because DI’s mission is to provide training to as many poor people as possible?

    As for the public option, this was of course the plan of most Obamacare supporters from the beginning, to sponsor a huge government-created mess and blame it on the free market so that the medical field could be nationalized by the government. Sorry, this is not the solution. The solution is to get government out of health care completely so that the market can provide lower prices and better health care. Our model should be the excellent health care of the 1950s, when government interference was minimal, rather than the government-created mess of today.

  10. IDIAT, it is nice to hear from a common-sense business owner because common sense is sorely lacking these days.

    The answer to your question is somewhat obvious, but let’s go through the logic. First of all, who starts a McDonald’s? These are franchise owners. They save up several hundred thousand dollars and start the franchise. Why would they do this? So they can make money. You don’t invest several hundred thousand dollars of your own money so you can make $10/hour (keeping in mind that the owners of these franchises work 80 hour weeks as it is). So, the owners, in the real world, aren’t going to take a pay cut. They will sell the business rather than do that, and then the new owner will face the same dilemma. So, why can’t they raise prices? What happens in the real world when McDonald’s raises its prices? People go to Wendy’s or Arby’s or Carl’s Jr or In N Out Burger. You can’t just raise your prices because you will lose money.

    So, in the real world, any increase in cost results in fewer workers and more unemployment. Price increases are simply very difficult to achieve in a competitive marketplace.

  11. IDIAT said ‘As costs rise, I simply pass them onto the consumer. Certainly, in the case of non-profits, the cost of Obamacare can’t be passed on. However, with for-profit businesses that are similarly situated, they could all keep their workers, pay the insurance premiums, and pass the cost onto consumers. Their profit margin remains the same either way. What am I missing?’

    Off the top of my head, the first thing I can think of is that you’re missing the thing about competition. Small business owners MUST take into consideration the prices the competition will be charging for their products and must either sell their product at a comparable price or make up for it in some other way such as quality of service or whatever to keep the customers they have. If a business chooses to keep its workers and provide healthcare and just pass on the cost to its customers, it must take into account that its competitors may NOT choose to do that and lower its costs by reducing employee hours and eliminating the cost of insurance that would normally have to be paid. If a company can reduce costs enough to stay competitive in other ways, great! But the company MUST at least take all these things into account when making their business decisions and unfortunately, when government creates costs that can be avoided, they are more likely to take that path.

  12. If McDonald’s raises it’s prices, in the real world people go to Wendy’s or Arby’s or Carl’s Jr or In N Out Burger. But if Wendy’s, Arby’s, Carl’s Jr. and N and Out Burger are all in the same position as McDonald’s with respect to Obamacare, and they collectively raised their prices, then wouldn’t they all be on equal footing? In general, in a competitive market place, the company offering the same product but at a lower price should “win” customers. Yet, the market place is rarely equal. A burger, fries and drink is a burger, fries and drink. Yet, I prefer McDonald’s over Wendy’s. So, even if McDonald’s goes up on price a little to account for the Obamacare rise in overhead, I’m willing to go to McDonald’s. At least to a degree. At some point, if the price of a burger, fries and drink rise to high, my taste buds will change in light of what I can afford and I’ll go to Wendy’s for the cheaper burger, fries and drink. I have seen instances where a local restaurant raised its prices. People still came in droves, despite their being strong competition to get a similar meal for less money. Why? Because ultimately, the quality of the service and the product merited the loyalty. Anyway, I’m just saying that I think it can be done, but all of this stuff is very fragile and fluid. And I don’t think my local McDonald’s franchisee would sell his business. He is raking in millions of dollars every year because he owns about 40 local stores. Will he have to take a hit to account for Obamacare? Yes. So he goes from clearing 10 million a year to clearing 7.5 million a year. He’ll survive just fine. And that’s what I mean when I refer to this whole business as a tax. Instead of being a straightforward tax on profits, its just a way of taxing profits by forcing businesses to pay for healthcare. I think ultimately businesses will adjust through a combination of laying off workers and/or passing along the costs to the consumer — us.

  13. I am not a liberal. I am fairly conservative in my political views but I have served the poor throughout my life and know how they suffer. Surely, we can do better as a country and as a Church to provide health care for the least among us.

  14. Katie, most of us Latter-day Saints have served the poor. Voluntarily. Without being forced to do it. And we enjoy it when we do it. Here is the bottom line: DI cannot provide health insurance to its employees without firing a lot of them. Would you like to go tell the people who are fired that they have lost their jobs so that other people can get health insurance?

    I would also point out that health care and health insurance are two different things.

  15. “The solution is to get government out of health care completely so that the market can provide lower prices and better health care. Our model should be the excellent health care of the 1950s, when government interference was minimal, rather than the government-created mess of today.”

    I don’t see how the free-market can possibly regulate an industry which is paid for almost exclusively in insurance payouts. Where is the competition in insurance payouts? Where is the price accountability to the consumer? Those are the fundamental keys of the free market, and when they are gone, bye bye capitalism.

    I’ve been living in the UK the last year, and spoken with a lot of people about this. Every single UK citizen, conservative or liberal that I know of, looks at the American system with absolute horror. Even with long wait periods, high taxes, and supposedly inferior quality, not a single UK citizen would ever sacrifice the National Insurance for the travesty we call US healthcare.

    Yes, I agree that Obamacare is a huge-government created mess. But it’s no worse than the free-market created mess we had before. There is a simple, imperfect solution: big, beurocratic, disorganized, nationalized healthcare for everyone, and specific, artsy, tailored healthcare for anyone who wants to opt out of the national insurance and pay for it themselves. But what we have now, with or without Obamacare, is an absolute disaster.

  16. Nate, I have lived in London and visit there regularly. Definitely not what I want. But cheer up: Obamacare is such a disaster that it will be replaced by something, and that something may eventually be nationwide single payer. So you may get your wish. I hope I am dead by then (but of course then my kids and their progeny will have to suffer under it).

  17. We haven’t had a free market for healthcare in decades. If the government would get out of the healthcare industry and let insurance companies compete across state lines for customers, healthcare prices would drop dramatically. When was the last time you ‘price shopped’ services from doctors/hospitals, etc? It hardly ever happens now and even if you WERE to call up a bunch of doctors and ask them what they charge for such and such procedure, most wouldn’t be able to tell you right off the bat and they’d wonder why you were asking. Why do you think this is? ‘Insurance’ has been morphed from true insurance, which is intended to cover catastophic events, into something that we expect to cover every healthcare need imaginable. It’s kind of like having car insurance that covers gas, tires, and maintenance costs. That’s not what insurance was intended for and there’s a REASON it’s the way it is for healthcare, but not that way for car, house, or other types of insurance. Government regulations and interference in the market place has created a disconnect between the customer and the provider. People with insurance today don’t even THINK about price because it doesn’t matter. And some ‘customers’ receive care for free because of laws requiring hospitals/doctors to provide care whether or not a person can pay. This all leads to insanely high prices for those who don’t have insurance.

    Another good example to look at is college tuition. College tuition is skyrocketing because of government interference. When the government pays people to go to school, and people don’t have to worry about how much the tuition is as much, schools will always raise prices to however high they can.

  18. Aaron, amen. I am very tired of people blaming the failures of government on the market, when there was no market in the first place. Government interference in health care in the 1960s helped create our current mess without lowering costs. In the small areas of health care where there is a market — elective surgery, Lasik, etc — service is inexpensive, costs are coming down and innovation takes place regularly. It is the areas of health care with no competition that are the source of our current problems.

  19. I would gladly pay more for the clothes and products at DI so that the employees have health care insurance. If the employers do not pay for health care insurance for those the workers who cannot afford it, the government will then pick up the costs of their medical care. Which seems more Christian and more in keeping with the teachings of the Savior?

    Of course, we recognize that health care insurance costs are skyrocketing and this is another problem that needs careful analysis. Why do we pay more for drugs in the United States than those in other countries pay? Why do citizens in Germany and Switzerland pay less per capita for medical costs while everyone is insured?

    Unless you have met anyone who is suffering or dying because of lack of access to medical care in the wealthiest country in the world, perhaps you can turn away, saying that all in well in Zion and that we need not concern ourselves with those those cannot afford health insurance. I cannot. I will not.

  20. Aaron is spot on. The world has changed. Catostrophfic insurance is not the only kind of insurance available.

    But even if it were theoretically preferable to only have catastrophic insurance, how could eliminating government possibly help to encourage people to only buy catastrophic insurance, and voluntarily give up comprehensive? The only way to eliminate comprehensive coverage is by having the government forbid it, and that is government interference.

    People want comprehensive insurance, and this is a democracy. Comprehensive insurance is anti-market, as Aaron has clearly demonstrated. Any plan that includes comprehensive insurance will fail in a free market system. So if conservatives have any plan to fix healthcare with the free market, it needs to start with outlawing comprehensive coverage. How well would that fly over?

  21. Our current insurance system is not a free market. In a free market, health insurance would operate comparably to car insurance, and the relationship between patients and doctors much more like the relationship between car owners and mechanics. Direct negotiation for services rendered, and insurance only picks up the tab on rare, catastrophic occasions. You don’t use car insurance to fil up your tanker replace your tire.

    So Nate, in our insurance system of health care, we not actually see market forces at work. And the system evolved to this point because health insurance, which was once very much like car insurance, responded to government incentives and regulations to become default payer of all health care costs. This isn’t the markets fault.

    What we need is less insurance altogether, and more direct negotiation between providers and consumers of health care. Most health care services renders should be done on a cash basis, and insurance used to guard against only catastrophic injuries and conditions.

  22. Nate, many doctors would love to cease accepting comprehensive insurance, and accept only cash payments — if they felt like they could. It’s better for doctors that way anyways, and they know it’s better for patients too. Some doctors have tried, only to be told they have to.

  23. “I would gladly pay more for the clothes and products at DI so that the employees have health care insurance.”

    Katie88, you are on to something here. Why don’t you start a movement to pay for the health insurance of DI employees? I am sure if you approached the management and offered to collect money for them they would accept. If you started such a non-profit movement, and it could be proven the money was actually going to the intended recipients, I would be happy to send in a check myself and promote it on M*. Voluntary charity — not the force of government — is the solution. Go for it.

  24. Katie: “If the employers do not pay for health care insurance for those the workers who cannot afford it, the government will then pick up the costs of their medical care.”

    Do you see the humor in this? This is like that classic segment of Jaywalking on the Tonight Show where a woman said, “I don’t think the American people should have to pay for this. I think the government should!” Where exactly do you think the government gets its money?

  25. The problem with the “gladly pay more at DI” is that you *might* help the workers, but then you would be causing a burden on the comsumer side of DI that is *also* about helping the poor. A few dollars more paying for clothing can make the difference between having to choose between naked and hungry. So you saved a few hundred jobs, but sent probably more than twice that number into poverty.

  26. But you are of course correct that many people, perhaps even a majority, think that “the government” has some kind of money set aside to pay for things that doesn’t affect anybody, kind of like a secret slush fund. And unfortunately they are correct, and it is the Fed.

  27. Less war, more affordable health care. Stop the oppression by the idle rich of the working poor.

  28. And while we are at it….trade off some defense spending for US infrastructure rebuilding. If corporate America cared about anything but profit we would not have to discuss the new reality of health care options. Health care by companies was offered as an inducement to obtain workers in the old days. Now the employees keep paying more for health care. We make less than our grandfathers.

    I like the “sequestration”. Wonderful to see those private sector workers in defense spending squeal when their jobs were on the line. Did not matter when it was somebody else.With the class distinctions enlarging by wealth and race we start to see a fulfillment of the B of M prophecies.

  29. OAK, less war, less spending on defense and everything else the government does. More choices in health care, which come with less government. I like the sequestration too. We need another one about 10 times as big.

  30. Libertarian Myopia is the belief that “the”market” will solve virtually all of our problems if we just let it work. Like most simple answers to complex problems, there are a huge number of difficulties. Lets examine several of the cost saving techniques used by medical groups/insurance companies.

    Pre-existing conditions: We all know the usual (you have diabetes, we won’t sell you insurance). However, there are other types out there. Family history of illness being the most noted and personal habits (smoking or drinking) being another.

    Recisiion: Dropping you from the plan because you cost too much.

    Redlining: Not insuring people in an area that does not have the income needed or that has a high risk population. Even seniors with medicare see this in places where there is little or no supplemental insurance.

    In sum, the market will not answer the needs of millions of people as cost saving will still exclude them.

  31. “In sum, the market will not answer the needs of millions of people as cost saving will still exclude them.”

    Perhaps the very model of using insurance to pay for medical health is flawed. We don’t use insurance to pay for groceries. Would anyone like to take a stab at why not? (Hint: the answer isn’t that food is plentiful or cheap.)

  32. Stan,
    Many of the issues you cite are of course similar to auto or home insurance. However, most people can still get insurance from a different company because the market is more fluid.
    Some of the insurance products would be tailored to the situation. If I offered a catastrophic insurance plan, the preexisting condition of diabetes would only have a minimal impact on premiums. The same would be true of redlining. A full coverage wellness plan like many companies offer, is of course, a very different situation. It also has different goals like overall employee well being and productivity.

  33. To look at the economics from another side, assuming these workers were previously working a normal 40 hour work week, then this amounts to a 25% cut in take home wages. Taking into account the assumption, stated multiple times above, that most people at DI are there to gain skills, and cannot find employment elsewhere, then this means that they will make less money, and require more time before they can find a second job. Let’s say it takes a year to acquire the necessary skills to be employable elsewhere, now it will take a year and 3 months, all the while bringing home 25% less money. Political opinions aside, it would be best for the workers if health insurance was provided.

  34. Logic, a bit of faulty logic. It is not preferable to tell 20 percent of the workers they must be fired so the remaining 80 percent can get health insurance. This does not fulfill DI’s mission. As I mentioned above, if you feel DI’s employees should have health insurance, why don’t you start raising money for DI? I would be happy to publicize your effort and even contribute some cash. Put your money where your…er…fingers are.

  35. My sister feels that something had to be done regarding health care and Obama care is the something that is better than nothing and the wrinkles will be ironed out with time.

    I don’t know enough to say I believe or disbelieve that, but it sounded good to me.

  36. el oso. The only problem with your idea is that is already possible. Catastrophic medical insurance exists. However, few people have it There are also cost avoidance reasons why many people cannot get it even if they can afford it..

    For example, It is not the diabetes itself that scares away insurance companies. It is the attendant side effects. The costs for a kidney transplant, dialysis before and rejection drugs afterward are only partially covered by medicare and can easily come to a million dollars. Losing a leg can cost over a hundred thousand dollars. Thus, there are people who have diseases like this who are denied effective or affordable catastrophic insurance in the free market.

    In addition, if you did not know it, doctors and hospitals jack up their prices for people who have to pay out of pocket. They do not have the bargaining power of the insurance companies and thus suffer the consequences.

    42% of bankruptcies are caused by medical expenses. The simple reality is that we need a national plan which will reduce costs and provide all citizens an opportunity to have adequate medical care. I would argue that a single payer plan would be best, but Obama/Romney care works in Massachusetts and the first rates in California are very low.

  37. In addition, if you did not know it, doctors and hospitals jack up their prices for people who have to pay out of pocket.

    This is actually largely false. Most hospitals and doctors I know will drastically reduce prices for cash paying customers. For most people, for example, childbirth is cheaper if it isn’t covered by insurance, because hospitals will offer cash discounts. Sometimes these discounts can be as much as half-off.

    So don’t spread falsehoods that simply aren’t true.

  38. Sure, some doctors and hospitals will give “discounts” to the uninsured. I had an ER visit once without insurance. Ended up being not serious, but I still got charged $7,000. Offered to pay in full as soon as I got the bill for a discount (which was, by the way, eight months after the visit…) They discounted me 30%. Then, because my wife was working at the hospital at the time, I asked for an additional discount. Total discount: 50%.

    Here’s the thing. Even though I got a substantial “discount,” I still ended up paying substantially more for it than an insurance company would have.

    So yes, the uninsured get screwed over, even if they do pay everything up front or as soon as they get the bill, and even if they manage to get other “discounts.” It’s a pretty screwed up system, and it’s no wonder lack of health insurance leads to so many bankruptcies.

  39. Here is the full statement from the Church:

    Salt Lake Tribune: Failing to Fully Explain the Core Purpose of Deseret Industries

    On The Salt Lake Tribune “Following Faith” blog, journalist Peggy Fletcher Stack reports that the Church’s Deseret Industries (DI), a nonprofit business enterprise that provides employment and aid to those in need, has reduced associates’ hours to avoid legal requirements to provide employees with healthcare benefits.

    Unfortunately, Stack omits prominent placement of important details about DI’s core purpose. Furthermore, it’s important to note that DI has both employees and associates, or trainees; employees’ hours were not reduced. In fact, as is shown below, Deseret Industries is adding benefited full-time employees.

    While Stack does mention that DI seeks to help trainees, “learn the skills, including English, to find better employment,” she doesn’t expound on the fact that DI jobs are meant to be temporary training positions, not full-time, long-term employment. These are job-skills development positions that are intended to help individuals get job training and work experience that can prepare them for better, more permanent positions that lead to self-reliance. Once trainees are accepted into the program, they are assigned a team of professionals who work closely with them to help them achieve their goals. While the trainees provide labor for Deseret Industries, the primary purpose of the program is to provide them with experience and future job placement and to get them into a better job as quickly as possible. The entire program exists to help people.

    In the article, Stack says DI associates “do not get health insurance, according to LDS Church spokeswoman Ruth Todd. Todd explained the cuts as a way ‘to serve as many people as possible.’ Reducing the trainees’ hours, she said, ‘has allowed for a dramatic increase in participants.’” Stack chose not to give Todd’s full statement, which is as follows:

    Deseret Industries is a unique training program and is unlike any other business. The program provides associates with the training, tools and skills necessary to find better employment and become self-reliant. As a training program associates receive hourly compensation, but not health insurance. The program seeks to serve as many people as possible and by reducing associates’ hours has allowed for a dramatic increase in participants.

    Other details are also important to note:

    By reducing hours, more trainees will have an opportunity to be accepted into the program. On 31 March 2013, when the Patient Protection and Affordable Care Act (PPACA) policy she mentions went into effect, DI had 2,469 trainees; on 14 May 2013, Deseret Industries had 2,922 trainees — that’s an increase of 453 trainees in six weeks. Furthermore, DI hopes to eventually increase the number of trainees hired to more than 3,200.
    At the time the PPACA change went into effect, more than half of the trainees already employed were working 30 hours or less.
    To accommodate the needs of additional trainees, DI will hire an additional 40 to 60 benefited full-time staff. Staff hours and benefits have not been impacted in any way.
    In 2012, DI placed more than 3,000 trainees in jobs with other organizations.

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