Video: Walgreens to dump employee coverage for 160,000

posted at 10:01 am on September 18, 2013 by Ed Morrissey

Remember “if you like your plan, you can keep your plan”? For 160,000 employees of Walgreens, that’s now old and busted.  The new hotness will be receiving a flat-rate bonus to spend in private exchanges in order to get out from under the costs of health insurance as ObamaCare rolls out:

Walgreen Co. (WAG), the biggest U.S. drugstore chain, will move its workers into a private health insurance exchange to buy company-subsidized coverage, the latest sign of how the debate over Obamacare is accelerating a historic shift in corporate health-care coverage.

Walgreen’s decision affects about 160,000 current employees and follows similar action this year by Sears Holdings Corp. (SHLD) and Darden Restaurants Inc. (DRI) As an alternative to administering a traditional health plan, all three will send their employees to an exchange run byAon Plc. (AON) Fourteen more companies will join in 2014 when 600,000 people will participate, Aon said.

The insurance options offered by the private exchange are similar to those in the Affordable Care Act’s public exchanges, though workers will get their subsidies from their companies instead of the government, said Ken Sperling of Aon. While the private effort isn’t directly linked to Obamacare, the debate over the law has spurred a new look at cost-cutting by businesses, municipalities and consumers.

The problem for employees, though, is that a flat subsidy for spending in private exchanges just transfers the burden of rising costs from the employer to the employee.  If employers like Walgreens expected ObamaCare to actually control costs, they wouldn’t be dumping employee coverage.   CBS This Morning’s Jill Schlesinger calls this “a big deal,” and points out that this gets Walgreens and other corporate employers off the hook for compliance costs:

“I can’t see how this is going to be good for the employee in the future,” Schlesinger adds, given the CBO projection yesterday of health-care cost escalation over the next twenty years.

By the way, this move comes just two months after Walgreens agreed to partner with HHS on promoting ObamaCare — which was supposed to drive that cost curve downward:

The nation’s largest drugstore chain is partnering with Blue Cross Blue Shield to promote ObamaCare before the new insurance exchanges open on Oct. 1.

Walgreens and the Blue Cross Blue Shield Association (BCBSA) launched a website Wednesday and promised to distribute brochures about ObamaCare at Walgreens stores around the country.

This must be part of that “great for thee, bad for we” promotion technique, huh?


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