Will Obamacare Force Employers to Drop Health Coverage?
That's the question that Philip Bredesen's excellent Wall Street Journal op-ed asks today. Bredesen, the Democratic governor of Tennessee, was elected to his post in 2002 specifically to fix TennCare, Tennessee's beast of a health care plan, which offers a public option.
We already know that Obamacare will cause insurance costs to rise for employers like Boeing, McDonalds and 3M (my employer recently sent out a letter to its employees stating that our insurance costs would rise too. In the fine print, the letter acknowledged that this is a direct result of Obamacare). Employers may therefore eventually drop insurance coverage altogether, forcing Americans into Obamacare's federally subsidized system.
Bredesen explains:
Our recent health reform has created a situation where there are strong economic incentives for employers to drop health coverage altogether. The consequence will be to drive many more people than projected—and with them, much greater cost—into the reform's federally subsidized system. This will happen because the subsidies that become available to people purchasing insurance through exchanges are extraordinarily attractive.
In 2014, when these exchanges come into operation, a typical family of four with an annual income of $90,000 and a 45-year-old policy holder qualifies for a federal subsidy of 40% of their health-insurance cost. For that same family with an income of $50,000 (close to the median family income in America), the subsidy is 76% of the cost.
One implication of the magnitude of these subsidies seems clear: For a person starting a business in 2014, it will be logical and responsible simply to plan from the outset never to offer health benefits.
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Aug '10
Re: Will Obamacare Force Employers to Drop Health Coverage?
The cost isn't the point, the dependence on the fed is. How could you ever vote against someone who is paying 75% of your health insurance ?
Aug '10
Re: Will Obamacare Force Employers to Drop Health Coverage?
Yes, and this has been the plan for many years. Get the federal government into the arena, establish rules and regs that are onerous to private companies (which the feds won't honor), drive them out of business, and arrive at single-payer, rationed, totalitarian control of every aspect of our lives. Obama and his minions were open about it until it became necessary to hide the agenda to get elected.
Re: Will Obamacare Force Employers to Drop Health Coverage?
I agree, the dependence on the fed is a scary point, but not necessarily because it would affect the way people vote, though it may. I think federally controlled health care is scary because it is taking one of the most intimate aspects of our lives--our health, our body, our lives--and placing it in the control of bureaucrats who will have the power to ration the kind of care we receive. I can't believe that such a system won't lead to more suffering and pain for the sick and a general devaluation of human life and dignity. It's inhumane. I never throw the term "evil" around to describe political happenings, but I'm tempted to in the case of Obamacare.
Jul '10
Re: Will Obamacare Force Employers to Drop Health Coverage?
All this must be music to the ears of Obamafiles, the goal of Obamacare, to ultimately create single payer, government run, costs be damned system, is advancing nicely. While many countries with socialized medicine are moving toward more private health care, Obama is stuck in a Stalinist rut and one can only pray that the GOP repeals this atrocity of an act and replace it with market driven alternatives. The window of opportunity to do so is very narrow, indeed.
Sep '10
Re: Will Obamacare Force Employers to Drop Health Coverage?
I agree with flownover and River, the democrats want a national single payer system. Totalitarian control isn't their goal but see Road to Serfdom Chapter 10: Why the Worst Get on Top.
The Republican counter should be a new law that requires an accounting treatment for the new healthcare whereby funds for the new healthcare cannot be co-mingled with general funds AND a balanced budget for the new healthcare law. That is, make the premiums and the benefits balance out. That would limit the subsidies equal only to what revenues are collected, which would destroy the healthcare bill. Unless of course the government could actually offer better insurance at a lower price.
Edited on Oct 21, 2010 at 7:25amAug '10
Re: Will Obamacare Force Employers to Drop Health Coverage?
Bredesen explains:
It's refreshing to hear from a Democrat who seems to understand incentives. (Is Bredesen a possible Ricochet guest? I at least am quite interested in his experience with TennCare.)
I know one of the uphill battles in explaining the failure of ObamaCare to my left-leaning friends will be to try to get them to see that responding to incentives isn't simply a matter of good or evil intent, but rather a natural and reasonable behavior that we all engage in.
Because I can already hear them saying, "Well, businesses shouldn't have succumbed to the temptation of the incentives. It's the businesses that are evil here. ObamaCare would have worked otherwise."
Jun '10
Re: Will Obamacare Force Employers to Drop Health Coverage?
Phil Bredesen made very tidy fortune founding and flipping HealthAmerica, a mid-size health insurance company. He was mentioned for HHS but Obama went with Sebelius, probably to avoid being confused by a cabinet officer who actually knew something about the industry being nationalized: "Excuse me, Mr President, but that's just not going to work ... No, sir, I don't care what Tom Daschle said ...."
Edited on Oct 21, 2010 at 10:36amMay '10
Re: Will Obamacare Force Employers to Drop Health Coverage?
It's been clear from the start that Obamacare will make it more burdensome for employers to manage health plans for their employees. How could anything involving dozens of new panels of bureaucrats not? As others have noted, single-payer was acknowledged as the ultimate goal before it became important for the Democrats to moderate their speech.
The beauty for the president and the left (but I repeat myself) is that Obamacare will not force anyone to drop their employee coverage, in that nothing will be written that forbids companies from covering their employees. The regulations - and there will be a billion and one of 'em, if we don't get this bill repealed - will provide plenty for lefties to hide behind even though the outcome will be what crazy conservatives warned of all along.