Millions Could Lose Their Employer Health Plan Under ObamaCare

Basically, anyone earning less than $60,000 (family) is at risk of losing his or her employer health plan.

CBO estimated that only 19 million residents would receive subsidies [in the newly created health insurance exchange], at a cost of about $450 billion over the first 10 years. This analysis suggests that the number could easily be triple that (19 million plus an additional 38 million in 2014) – the gross price tag would be roughly $1.4 trillion.

Full study by Douglas Holtz-Eakin, Former Director of the Congressional Budget Office, here.

Comments (6)

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  1. Devon Herrick says:

    According to data from the Census Bureau, something like 111 million people under age 65 fall within the income range (133% to 400% of poverty) to qualify for a subsidy in the exchange. Yet, CBO only estimates 19 million will actually get a subsidy in the exchange. The remaining 92 million will have employer coverage. For a moderate-income worker, the subsidy in the exchange is four-to-five times the tax subsidy for employer coverage.

    The only logical conclusion is that the number of people who ultimately migrate to the exchange for the larger subsidy (probably when their employer drops the company health plan) will be much greater than the 19 million CBO estimates.

  2. Tom H. says:

    I think it could even be worse. We may be on the verge of a complete collapse of the employer-based health insurance system.

  3. Joe S. says:

    It seems like every day brings some new revelation about Obama Care — all of it bad.

  4. artk says:

    Companies can’t just decide to drop coverage for employees under a certain income level, health insurance is subject to IRS nondiscrimination rules, it’s pretty much all or nothing. Employers see benefits as a critical element in employee recruitment and retention. Health care reform won’t change that, and health care will continue to be a key element of employee benefit plans.

  5. Linda Gorman says:

    artk–employers can change the composition of their labor force by contracting with firms that specialize in providing lower cost labor. This blog has already discussed the possibility that the arbitrary income limits in ObamaCare could lead to a certain amount of cost-minimizing restructuring.

  6. Don Levit says:

    I was under the impression that the new law caps insurance subsidies to some percentage of GDP.
    If health care costs continue to grow faster than GDP, then consumers will be exposed to pro rata higher premiums and lower subsidies, correct?
    Don Levit