What’s that you ask? Well, a recent survey by McKinsey Quarterly has found out that fully 1/3 of employers plan to stop offering healthcare come 2014, once provisions of the Affordable Care Act start to kick in, and that’s on top of the 7% employees forced to switch to subsidized-exchange programs we already know about.
While only 7% of employees will be forced to switch to subsidized-exchange programs, at least 30% of companies say they will “definitely or probably” stop offering employer-sponsored coverage, according to the study published in McKinsey Quarterly.
The survey of 1,300 employers says those who are keenly aware of the health-reform measure probably are more likely to consider an alternative to employer-sponsored plans, with 50% to 60% in this group expected to make a change. It also found that for some, it makes more sense to switch.
“At least 30% of employers would gain economically from dropping coverage, even if they completely compensated employees for the change through other benefit offerings or higher salaries,” the study says.
Those of us that warned this was the plan from the start and that the ludicrous claim that people would get to keep their coverage was a huge slight of hand, are yet again vindicated. And this will have a snowball effect. As employers drop their coverage government will have to jack up both the penalties on them and the costs on those that keep them to cover for the shortfall. In the long run everyone will figure dropping coverage is cheaper anyway. And then the left gets what they wanted: government in charge of healthcare. Then the fun can begin!
The response from the WH?
Late Monday, an Obama administration official took issue with the study, saying that it is at odds with findings from the Congressional Budget Office, think-tank Rand Corp. and the Urban Institute. In an email response, the official wrote that when Massachusetts initiated its own reform, the number of individuals with employer-sponsored insurance increased.
Indeed, the Rand study released in April noted: “The percentage of employees offered insurance will not change substantially, but a small number of employees in small firms (defined as those with under 100 employees in 2016) will obtain employer-sponsored insurance through the state insurance exchanges.”
Employers with less than 100 employees are the biggest employers in the US. BTW, one of the major reason most of them are not hiring, no matter how booming their business may be, is precisely the risks and unknowns tied to Obamacare. My bet? Employers, especially small business owners, will start dropping heaqlthcare like it’s radioactive as more of this disastrous government takeover of healthcare goes live.