“Perversely, ObamaCare both drives up the cost of insurance with mandates and rules while making it attractive for companies to dump the increasingly more expensive coverage and pay a lesser fine. There will be huge ramifications for the country’s finances if more workers lose coverage than was estimated.”
“One of the main criticisms of Obamacare is that it will significantly reduce the incentive for small businesses to hire — especially once the premium subsidies become available in 2014… But the actual implementation will be complex, thanks to an odd retroactive feature.”
“Specifically, the government’s position rests on two false economic claims. First, that an individual’s decision not to buy health insurance substantially affects interstate commerce by increasing the costs of health insurance for all Americans.
Second, that the health care industry is ‘unique’ because of its high rates of participation, high costs, federal mandates and the purported uncertainty surrounding when care will be required.”
“The incentives built into the legislation are pretty straightforward: Employers who don’t offer coverage will have to pay a penalty. But the penalty in many cases will be far less than the cost of coverage. So even with the penalty, they’ll be able to shift employees into the subsidized exchanges, save money, and perhaps even give their employees a raise as they do. As Credit Suisse’s response says, ‘While the figures are staggering, they are simply an economically-rational response by employers to federal health policy to shift the U.S. from an employer-purchased to an individually-purchased insurance market.'”
“A report by McKinsey & Co. has found that 30% of employers are likely to stop offering workers health insurance after the bulk of the Obama administration’s health overhaul takes effect in 2014. The findings come as a growing number of employers are seeking waivers from an early provision in the overhaul that requires them to enrich their benefits this year.”
“The more a company knows about coming changes to the nation’s health care laws, the more likely it is to consider radically restructuring the way it provides insurance to employees, according to a study by the consulting firm McKinsey and Co. The study, which is being circulated among Republicans, predicts that as many as 30 percent of companies will stop offering health insurance benefits, reduce the level of benefits, or offer benefits only to certain employees. If this prediction holds, the number of Americans who could see changes to their health insurance would be far more than the 9 million to 10 million estimated by the Congressional Budget Office.”
“Our research suggests that when employers become more aware of the new economic and social incentives embedded in the law and of the option to restructure benefits beyond dropping or keeping them, many will make dramatic changes. The Congressional Budget Office has estimated that only about 7 percent of employees currently covered by employer-sponsored insurance (ESI) will have to switch to subsidized-exchange policies in 2014. However, our early-2011 survey of more than 1,300 employers across industries, geographies, and employer sizes, as well as other proprietary research, found that reform will provoke a much greater response.”
“ObamaCare will lead to a dramatic decline in employer-provided health insurance—with as many as 78 million Americans forced to find other sources of coverage. This disturbing finding is based on my calculations from a survey by McKinsey & Company. The survey, published this week in the McKinsey Quarterly, found that up to 50% of employers say they will definitely or probably pursue alternatives to their current health-insurance plan in the years after the Patient Protection and Affordable Care Act takes effect in 2014. An estimated 156 million non-elderly Americans get their coverage at work, according to the Employee Benefit Research Institute.”
“Obamacare encourages employers to dump coverage on two fronts. First, several provisions will increase the cost of employer-sponsored insurance (ESI), including new insurance requirements and mandates, and a tax on high-cost health plans. Employers who don’t offer a minimum level of coverage deemed essential by the federal government will face a penalty of $2,000 per worker, but as the authors point out, Obamacare’s other ‘requirements will increase medical costs for many companies. It’s important to note that the penalty for not offering coverage is set significantly below these costs.'”
“Are small-business owners taking advantage of a new tax credit made available last year under the Affordable Care Act?
The Small Business & Entrepreneurship Council, an advocacy group that has been critical of the health-care law, says no – and offers its own research indicating that owners aren’t finding the tax credit useful or applicable to their companies… The SBE Council polled a random sample of 304 small-business owners and found that only 7% have taken advantage of the health-care tax credit.”