Some employers dropping health insurance
Among the biggest lies told by President Obama as he was ramming his health care bill through Congress was that if Americans liked their current health insurance coverage, they would be able to keep it. We’ve previously showed that some Americans have already seen their plans change or they’ve lost coverage thanks to ObamaCare. But a new study gives us at least some idea of the initial impact of the law, showing that one out of every 10 employers will drop health insurance coverage:
Around one in 10 employers in the U.S. plans to drop health coverage for workers in the next few years as the bulk of the federal health-care law begins, and more indicated they may do so over time, according to a study to be released Tuesday by consulting company Deloitte.
The majority of Americans under age 65 who have health insurance get it through an employer. A big question about the law is whether companies will continue to offer coverage after a slate of changes starting in 2014 will give Americans more options for buying coverage without the help of an employer.
Most companies currently offer coverage voluntarily because they say it helps them recruit and retain workers. Critics of the overhaul argue that it could encourage companies to drop those plans if they become more expensive since the law requires them to provide a set level of benefits or pay a penalty.
In all, 9% of companies in the Deloitte study said they expected to stop offering insurance in the next one to three years. Around 81% were planning to continue providing benefits, and 10% weren’t sure.
But around one in three respondents said they could decide to stop offering health coverage if they find that the law requires them to provide more generous benefits than they do at the moment; if a tax on high-cost plans takes effect in 2018 as scheduled; or if they conclude that the cost of penalties for not providing insurance could be less expensive than paying for benefits.
Penalties for not providing health benefits after 2014 start at $2,000 per worker for companies with 50 or more full-time employees. Most companies already spend thousands of dollars more to cover each worker, although those costs come with tax breaks and can also reduce the wages that employees expect.
Many businesses are going to heavily weigh their options on continuing to provide coverage. The $2,000 per employee fine is likely less than the share most businesses pay for insurance benefits, so it would make financial sense to end their benefits programs.
We’re a little more than a year from the law being fully implemented, and we’re already seeing employers make these changes. Some may say that this isn’t a substantial percentage, but we’re dealing with a lot of workers, many of whom will likely have to go into the heavily-subsidized (ie. taxpayer-funded) state exchanges, assuming they are funded, to take out health insurance coverage.
But again, here is more proof that ObamaCare was falsely sold to Americans. We now know — despite promises to the contrary — that Americans may not be able to keep their current health coverage, the law will cost more than promised, and it will not contain health care costs. What else could possibly go wrong?