Archive for Thursday, August 25, 2011

Health overhaul may push benefits shift

August 25, 2011


— Nearly one of every 10 midsized or big employers expects to stop offering health coverage to workers after insurance exchanges begin operating in 2014 as part of President Barack Obama’s health care overhaul, according to a survey by a major benefits consultant.

Towers Watson also found in its July survey that another one in five companies are unsure about what they will do after 2014. Another big benefits consultant, Mercer, found in a June survey of large and smaller employers that 8 percent are either “likely” or “very likely” to end health benefits after the exchanges start.

The surveys, which involved more than 1,200 companies, suggest that some businesses feel they will be better off dropping health insurance coverage once the exchanges start, even though they could face fines and tax headaches. The percentage of companies that are already saying they expect to do this surprised some experts, and if they follow through, it could start a trend that chips away at employer-sponsored health coverage, a long-standing pillar of the nation’s health system.

“If one employer does it, others likely will follow,” said Paul Fronstin of the Employee Benefit Research Institute. “You would see this playing out over the course of years, not months.”

A large majority of employers in both studies said they expect to continue offering benefits after these exchanges start. But former insurance executive Bob Laszewski said he was surprised that as many as 8 or 9 percent of companies already expect to drop coverage a couple of years before the exchanges start.

Such a move could lead to more taxes for both companies and employees, since health benefits currently are not taxed, and companies could be fined for dropping coverage. It also would give their employees a steep compensation cut if they don’t receive a pay raise, too.

“Dropping coverage is going to be very difficult for these (companies) to do,” said Laszewski, a consultant.

Towers Watson’s Randall Abbott said the survey results should be seen as a snapshot of how companies are thinking now, not as a final decision, because there still are many unresolved variables. Companies may change their thinking once they learn more about how the exchanges will work or whether employees will accept them.

The health care overhaul also faces court challenges, and President Obama is up for re-election next year, two more variables that could shape what happens in 2014 and afterward.

The Obama administration took issue with the Towers Watson survey, pointing out that studies by the nonpartisan Congressional Budget Office and nonprofits like Urban Institute reached different conclusions.

An Urban Institute study projected that the overhaul will have little effect on employer-sponsored insurance. When lawmakers debated the legislation, the CBO projected it would only have minimal impact on employer plans. About 3 million fewer people would be covered through work, but they’d be able to get insurance elsewhere.

Health and Human Services spokesman Richard Sorian said the administration expects to see a rise in employer-sponsored health insurance, not a decline.

“History has shown that reform motivates more businesses to offer insurance,” said Sorian. “Health reform in Massachusetts uses a similar structure, and the number of people with employer-sponsored insurance in Massachusetts has increased.”


Richard Heckler 6 years, 3 months ago

If all city and state governments plus the federal government would cut corporate welfare and invest this money in IMPROVED Medicare Single Payer Insurance for ALL :

  1. many of us would be saving thousands of dollars annually

  2. big business and small business could operate for less

  3. all governments and school districts could cut operating expenses substantially

  4. employed blue and white collar workers would be healthier thus more productive

  5. all humans would have necessary healthcare 24/7

  6. in general OUR cost of living would decrease across the board

  7. New industry,small business and jobs would develop

Thus our tax dollars would be invested in our local communities providing a jump start to economic growth that has been squandered as one result of corp welfare.

Richard Heckler 6 years, 3 months ago

What would IMPROVED Medicare Single Payer Insurance Provide?

Single Payer Medical insurance cannot get any better than this.

IMPROVED Medicare Single Payer Insurance for ALL would cover every person for all necessary medical care 24/7 to include:

  • Wellness
  • prescription drugs
  • hospital
  • surgical
  • outpatient services
  • primary and preventive care
  • emergency services
  • dental
  • mental health
  • home health
  • physical therapy
  • rehabilitation (including for substance abuse)
  • vision care
  • hearing services including hearing aids
  • chiropractic
  • durable
  • medical equipment
  • palliative care
  • long term care

No deductibles - No Co-pays - No more bankruptcy

Richard Heckler 6 years, 3 months ago

Moreover, tax dollars also pay for critical elements of the health care system apart from direct care that impacts everyone of us.

Medicare funds much of the expensive equipment hospitals use, for instance, along with all medical residencies. (Killing medicare will certainly increase the cost of medical insurance from corp america substantially)

All told, then, tax dollars already pay for at least $1.2 trillion in annual U.S. health care expenses. Since federal, state, and local governments collected approximately $3.5 trillion in taxes of all kinds—income, sales, property, corporate—in 2006, that means that more than one third of the aggregate tax revenues collected in the United States that year went to pay for health care.

Recognizing these hidden costs that U.S. households pay for health care today makes it far easier to see how a universal single-payer system—with all of its obvious advantages—can cost most Americans less than the one we have today.

Medicare must exist in the fragmented world that is American health care—but no matter how creative the opponents of single-payer get, there is no way they can show convincingly how the administrative costs of a single-payer system could come close to the current level.

Does the medical insurance industry over charge their clients? You bet by the billions of $$$$.

Richard Heckler 6 years, 3 months ago

All of this uproar over Obamacare is not about Obamacare. It is about larger profits for corp america including the medical insurance industry and their shareholders.

Big time corp america has been complaining about the cost of medical insurance for at least 31 years. They have been dropping medical insurance coverage for at least that long. Long before Obamacare

Medical Insurance costs have been increasing at rates greater than the cost of living for 30 years at least ....long before anybody ever heard of Obama.

50% of bankruptcy cases are about medical care by those with medical insurance = most all today are under insured in a big way. Long term cancer treatment will bring this to the surface.

This is not about Obamacare believe me. This is about the greedy medical insurance industry that spends tons of health insurance care dollars on politicians aka bribery. This industry gets more than $1 trillion tax dollars annually from YOU!

IMPROVED Medicare Single Payer Insurance can cover everyone in the USA for less than the $1.5 trillion tax dollars going to the medical insurance industry as we speak.

Jean Robart 6 years, 3 months ago

no, it's about Obamacare, and the "visionary" (note wink wink) who got it shoved through a dem controlled compromise

Bob_Keeshan 6 years, 3 months ago

You clearly know nothing about the VA, other than stories and movies you remember from the 70's and 80's.

somedude20 6 years, 3 months ago

Yes, the VA are doing great things these days. Not only are tests results done faster than private practices but the level of mental health treatment for returning Vets is mind blowing (pun intended). Tele-med is the wave of the future. Also, LJW did a story about how the VA is the master with digital records

Paul R Getto 6 years, 3 months ago

AML: Barry-----you are unusually poetic today. I admire the music of your muse. Does it know more than one note?

Cait McKnelly 6 years, 3 months ago

And Snap has responded! tee hee! nudge nudge Do it again, Merrill. Pavlovian responses are so funny.

oldvet 6 years, 3 months ago

'“Dropping coverage is going to be very difficult for these (companies) to do,” said Laszewski, a consultant.'

It will be simple for the companies to do. They will do a cost analysis on the cheaper option - the insurance or the penalty. Then they will do the same thing they did when they saw it was cheaper to provide a small employer contribution to a 401K than to provide a retirement benefit. They will take the least expensive option and in a poor jobs economy, you will learn to live with it. Soon company-sponsored health insurance will be a dim memory. Try to find a private company that has a retirement plan for non-union employees who are starting today.

just_another_bozo_on_this_bus 6 years, 3 months ago

"Soon company-sponsored health insurance will be a dim memory."

Good. Let's just hope we get smart and replace it with a single-player plan that lets businesses get out of the healthcare business and saves us all $billions while dramatically improving healthcare access for 40 million Americans.

Getaroom 6 years, 3 months ago

It is believed that with the drastic changes coming in health care, snap_pop_no_crackle will also lose the ability to pop(off). That will make all this much less painful. Ah, if only.........

Thanks once again Merrill for your input!

gphawk89 6 years, 3 months ago

So what happens when the amount that Medicare (Obamacare - single-payer insurance - whatever you want to call it) decreases the per-patient amount they pay the physicians so much that physicians simply sign off of Medicare? That's already happening. The Obamacare solution? Give physicians the choice of accepting Medicare or losing their medical license. I'll bet a good number of physicians will choose the latter. They're smart - they'll find something else profitable to do for a living.

jafs 6 years, 3 months ago

That's a rather funny combination of things in your first sentence, given that the ACA is completely different from Medicare, and doesn't even include a public option.

Your next question is a good one, and it exists already - what good is a program like Medicare if doctors simply choose to not accept Medicare patients? If we're going to have it at all, we have to make sure enough doctors accept those patients.

Paul R Getto 6 years, 3 months ago

"Soon company-sponsored health insurance will be a dim memory." === Sponsored? This whole scam started decades ago when companies either couldn't or wouldn't give raises. Companies started reducing employee's pay to deal with insurance, or 'gave' them insurance instead of a raise. If you get company-sponsored health insurance, you have agreed to let them divert part of your salary to the program. (OR, it's use it or lose it.) There is no real sponsorship or a gift. Single payer is the way to go, but neither party wants to cut off their gravy train from big pharma and the 'health' insurance companies, who have no particular interest in health, only profits for the stockholders. Good discussion I might add; better than some of the usual drivel.

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