Free Markets, Free People

Survey: As ObamaCare kicks in up to 30% of employers plan to drop health care coverage

This, of course, is “unexpected” (and not believed) by some.  In fact, the White House has pushed back saying the findings of the survey of 1,300 employers is at odds with findings from the CBO, Urban Institute and Rand Corporation studies.

In an email response, the official wrote that when Massachusetts initiated its own reform, the number of individuals with employer-sponsored insurance increased.

Indeed, the Rand study released in April noted: “The percentage of employees offered insurance will not change substantially, but a small number of employees in small firms (defined as those with under 100 employees in 2016) will obtain employer-sponsored insurance through the state insurance exchanges.”

In a Jan. 25 study, the Urban Institute said that reports of the demise of employer-sponsored insurance were “premature” and that few would stop offering.

“Our results show the opposite — the [Affordable Care Act] has little effect on overall [employer-sponsored] coverage, and overall employer spending on health care would be slightly lower under the ACA,” according to its own study.

However, one can speculate that as the law becomes better known, employers are having second thoughts about trying to cope with something most of them would just as soon lay off elsewhere.  The cost and hassle just aren’t worth it and now that there are alternatives, a good percentage of them are actually interested in pursuing them:

The survey of 1,300 employers says those who are keenly aware of the health-reform measure probably are more likely to consider an alternative to employer-sponsored plans, with 50% to 60% in this group expected to make a change. It also found that for some, it makes more sense to switch.

“At least 30% of employers would gain economically from dropping coverage, even if they completely compensated employees for the change through other benefit offerings or higher salaries,” the study says.

It goes on to add: “Contrary to what employers assume, more than 85% of employees would remain at their jobs even if their employers stopped offering [employer-sponsored insurance], although about 60% would expect increased compensation.

Health care benefits are a net loser for any company.  Cost added to the requirement for staff, contracts, problems, etc. makes it a program many employers would love to ditch.  But such benefits have become a part of any competitive package through the years – the better the benefits, the more attractive the offer.  Now, under ObamaCare, those “Cadillac” plan are going to be taxed (well, unless you have an exemption like most unions).  So there’s little incentive to continue with them.  Consequently, despite promises to the contrary, employers aren’t going to pay for something that is going to be taxed at a higher rate.   So you won’t get to keep your plan.

Employers, in the meantime, are looking for cost savings alternatives and dumping health care cost and the associated hassles has to be very attractive to them.  So it comes as no surprise, at least to me, that 30% of those surveyed are considering exactly that.   A huge “told you so” that critics pointed to prior to ObamaCare passage that was largely waived away by supporters.

So who you going believe – CBO, Urban Institute and Rand, or human nature?

Yup – me too.

~McQ

Twitter: @McQandO

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15 Responses to Survey: As ObamaCare kicks in up to 30% of employers plan to drop health care coverage

  • Feature, not a bug.

  • El Weasel Grande knew what he was saying when he said “you can keep your plan”, because he knew there’d soon be no plan to keep.

    • Universal Nationalized Single Payer Health Care is the only way to operate the heath care of a country in todays modern World. And that is why ALL European countries, Canada, Japan, Australia, Israel, in fact ALL, repeat ALL, developed nations operate health care on one form or another of Universal Nationalized basis. In fact only USA and some failed states such as Sudan, Somalia, etc. do not have Universal Nationalized Health Care (“NHS”).

      This last statement alone should prove beyond any shadow of doubt as to what utter complete lunatics, really what enemy of American people, Republicans (and the LYING right-wing Media, and total clods like you behind them) are to be against NHS, given that all developed nations in the World have NHS, given that … the Conservative parties in UK, Germany, Canada, Israel, etc. all are 100% for their NHS.

  • ANNNNNNNnnnnnnnnnnnd…

    we learn today, in news of the Obamanana Republic, there is no legal authority for the Tidal Waivers.

    They just make sh!t up to suit them.

    • “Laws!?  We don’t got no steenking laws!  WE.  DON’T NEED.  NO. STEENKING LAWS!”
       
       

    • Besides, it’s like Nancy said, we had to pass it to find out what was in it, and when they found out that they had forgotten the “Department of waivers to friendly political donators” clause, they quickly invented the authority to grant them.

  • “It goes on to add: “Contrary to what employers assume, more than 85% of employees would remain at their jobs even if their employers stopped offering [employer-sponsored insurance], although about 60% would expect increased compensation.”
    That tells you how scared workers are of losing their jobs that 25% would take a massive pay cut without blinking.

    • Don’t forget, management studies show that LOTS of us are not incentivised merely by our compensation.  And some of those workers know…in their little dark hearts…they are OVER-PAID.

      And “…without blinking…” seems a gross overstatement, yes?

  • For years we have been told that employer sponsored health care plans make US industry uncompetitive with Europe, etc. who have gov’t. health care. It looks like we are about to test whether that proposition is true.  

    • As long as we’re goin to hell, let’s do it in style, I want a European style vacation package too.

  • I suggest that the problem is that ObamaCare gives employers an easy out.  They don’t really want to pay for employee health care (it’s hideously expensive), and now they are being given an out: throw their employees into the government system.  “Gosh, sorry, guys, but that ol’ ObamaCare made it to expensive for us to keep offering health benefits, but not to worry: Uncle Sugar will take care of you.”

    • “Uncle Sugar will take care of you.”
      We should be forever grateful that the Kanamit have come to earth to run our government for us!

  • Contrary to what employers assume, more than 85% of employees would remain at their jobs even if their employers stopped offering [employer-sponsored insurance], although about 60% would expect increased compensation.
    Sounds about right to me. I wouldn’t quit my job if I lost insurance via work – but I would expect increased compensation, since otherwise I’d be suffering a significant loss in total compensation.
    I can buy insurance with the money, it turns out, and with the sort and level of coverage I want, rather than what my employer might want. Sadly, there’s no way to opt-out of state-level mandates for coverage…

  • I don’t doubt that ObamaCare will encourage employers to drop health care coverage, but it would be interesting to know how many employers planned to cut health care coverage before or in spite of ObamaCare due to increased health care costs, high unemployment (more competition for jobs generally equates to less competition required to keep employees), and other unrelated reasons.