Judging by the Obama administration’s push to get people enrolled in the insurance exchanges of the Affordable Care Act (ACA), one would think that is the most pressing problem for the healthcare law. But according to National Journal, “Perhaps the biggest obstacle Obamacare faces today isn’t getting people in the system, but making sure those who do get in actually receive affordable care.”
That’s because, writes Clara Ritger, “for the vast majority of Americans, premium prices will be higher in the individual exchange than what they’re currently paying for employer-sponsored benefits, according to a National Journal analysis of new coverage and cost data. Adding even more out-of-pocket expenses to consumers’ monthly insurance bills is a swell in deductibles under the Affordable Care Act.”
The assumption on the part of the healthcare law’s backers is that most employers will continue to offer health insurance to their employees, especially since they will be penalized for failing to do so. Thus, they argue, even if the law does drive individual rates up significantly, it will not affect many people, and a large portion of those who are affected will be cushioned from the shock by generous taxpayer subsidies.
However, as Ritger points out, only about half of Americans currently get health coverage through their employers, and the number of employers offering health insurance has been declining for at least a decade. What’s more, ObamaCare’s incentives to drop coverage for employees are considerably greater than its penalty for doing so, meaning that the trend away from employer-sponsored insurance is likely to continue and perhaps even accelerate.
ObamaCare’s employer mandate penalizes employers with 50 or more full-time employees at least $2,000 per full-timer who buys insurance on an exchange because his employer failed to offer him affordable coverage. Since employers often pay much more than $2,000 per year per employee for health coverage, it will be in their financial interest to drop coverage and pay the penalty — and perhaps even to offer their employees a pay increase to cover the cost of insurance they will now have to buy on the exchange.
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