Will Obama’s Health Insurance Exchange Crowd Out Employer Coverage? Lessons from Massachusetts.
This is Harvard Business School Professor Regina Herzlinger, writing in National Review:
In Massachusetts, for example, subsidies available only to the non-insured (for example, families of four earning up to $66,000) and relatively low penalties for employers who do not offer health insurance have already caused enrollment in employer-sponsored health insurance to slip from 85 percent in 2003 to 78 percent in 2007. Similarly, employer contributions for the payment of policies declined from 82 percent in 2001 to 75 percent, compared to 85 percent nationally, in 2007.
Prepare to lose you employer plan.
Agree with Neil. Private insurance is going to get crowded out.
There’s an informative paper published by the Commonwealth Fund (!) written in English by Swiss and Dutch health economists (R.E. Leu et al., “The Swiss and Dutch Health Insurance Systems: Universal Coverage and Regulated Competitive Insurance Markets”, Commonwealth Fund Publication No. 1220, January 2009). The authors conclude that the Swiss reforms of 1996 cut competition amongst health insurers in half or more (which is hard to measure because the 1996 reforms artificially demanded that the basic, mandatory insurance be offered by non-profit carriers, while additional, underwritten insurance could be offered by for-profits, so holding companies have non-profit and for-profit operating companies.) The authors also suggest that the insurers are able to game the risk-adjustment payments that are supposed to attract them to subscribe sicker patients.
This indicates that president Obama’s promise that his take-over will result in more competition and better care for sick patients is not credible.
It seems like employer are dropping coverage of those with incomes below a certain level and opting to pay the tax instead. But if that leaves small businesses more flexible and more profitable, is that a bad thing? Just because there was a seven point decline over a few years, does not mean it will continue to slide to zero.