ObamaCare Will Cause Employees to Lose their Employer Plans
Once provisions of the Affordable Care Act start to kick in during 2014, at least three of every 10 employers will probably stop offering health coverage … While only 7% of employees will be forced to switch to subsidized-exchange programs, at least 30% of companies say they will “definitely or probably” stop offering employer-sponsored coverage, according to the study published in McKinsey Quarterly.
Full report from The Wall Street Journal’s MarketWatch.
This is the response to the report by Credit Suisse:
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, just like the 401(k) did with pension, but likely at a far more accelerated pace, in our view…. We also think that if 30%-50% make the move, others will likely follow.
The 30% figure is probably low. This is especially true of small employers and moderate-wage employers; and firms employing workers in high-cost areas.
For moderate-income workers the exchange subsidy is about five times greater than the tax subsidy for employer plans. In many instances, workers qualify for exchange subsidies worth $15,000 or more depending on their income and where they live.
Any time the exchange subsidy far exceeds the penalty for much of a firm’s work force, it makes sense from an employer standpoint to drop coverage, pay the fine, raise cash wages and send workers to the exchange.
Haven’t you posted the same story twice?
Sometimes we need to hear things twice to really sink in so if it’s been posted twice, I’m glad, otherwise, I wouldn’t have seen it.