If you like your health insurance, you can keep your health insurance. That’s what Barack Obama and the Democrats promised with ObamaCare, as well as a pledge that it would “bend the cost curve downward.” A new survey of 661 businesses conducted by benefits consultant Towers Watson shows that the backbone of health-insurance delivery — employers — don’t believe the latter promise. As a result, it may be difficult for Obama and his allies to deliver on the former:
Big companies think health care legislation will increase their costs, but most expect to continue offering subsidized benefits to workers, according to a Towers Watson study.
The benefits consultant surveyed 661 companies this month and found that 94 percent of those that responded believe the law passed by Congress this year will raise costs. Eighty-eight percent plan to pass the increases on to employees, and 74 percent anticipate reducing health benefits and programs.
That could mean insurance co-payment or deductible increases or more high-deductible plans, said Mark Maselli, who heads Towers Watson’s North American Health and Group Benefits unit.
He added that companies will likely continue to offer “medical coverage that individuals are used to having” at least for the foreseeable future. Nearly three quarters of the companies responding to the survey said they expect to continue providing subsidized coverage for active employees.
Wow … nearly three-quarters, eh? That means that over 25% are considering dumping their health insurance to employees. If that’s indicative of a national trend, that would mean almost 40 million people could find themselves looking for individual plans in the next few years. And once that many companies start trimming these costs to improve their competitive posture, then their competitors will follow suit. The “nearly three quarters” not looking at ending health insurance will fall quickly with that kind of competitive pressure.
That has serious implications for the costs of ObamaCare. The subsidies for insurance extend all the way to those making $88,000 per year, which in the general population means about 62% of all American households. An unplanned dumping of 40 million individuals into the subsidized exchanges would dramatically increase federal expenditures in ObamaCare, expanding the deficit and creating a new runaway entitlement obligation that currently doesn’t exist.
That’s not all. The same study shows that 43% are seriously looking at curtailing and/or ending their retiree benefits, thanks to the increased costs of ObamaCare. That means more pressure on Medicare, and more people who won’t be able to keep their insurance and providers.
Two years ago, dumping employees out of health-care plans would have been unthinkable for competitive reasons. The Obama administration and Democrats in Congress have made it not just thinkable, but downright rational. Unfortunately, the positive outcomes of eliminating the employer link to health insurance will not be partnered with a free-market insurance environment, but a top-down government-control system that will force insurers out of business. It means that we are heading quickly into a single-payer system, thanks to ObamaCare.