Thursday, August 11, 2011

Employer Coverage Dumping - A Prediction Coming True


In May of 2010 I wrote this about the impact of the then-new health reform law on employer-sponsored coverage:

More employers, already at or near the break point of providing health insurance coverage as an employment benefit, will elect not to

Today, there's this from Avik Roy at Forbes:

there’s a new study that suggests that employer dumping under Obamacare could be significant, leading to an explosion of the law’s costs and thereby the federal debt. A working paper by economists Richard Burkhauser and Sean Lyons of Cornell and Kosali Simon of Indiana, published by the National Bureau for Economic Research, examined various reasonable assumptions regarding the behavior of employers under the law.

Burkhauser and colleagues found that, in a worst-case scenario, the number of people covered by Obamacare’s subsidized exchanges could be more than double the estimates of the Congressional Budget Office and the Joint Committee on Taxation. “In the most dynamic case (broad affordability and maximum change in premiums)…Exchange coverage increases from 10.23…to 22.89 percent” of the privately-insured workforce. This would lead to worst-case of $48 billion a year in additional federal spending, according to a version of the study published by the Employment Policies Institute.

Well, hey. When your budget is $1.3 trillion in the hole, what's another measly $48 billion on top? Read the rest of Avik's post at Forbes here.



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