Kaiser: Employers getting ready to dump workers into ObamaCare

[Stephanie]

well well say it aint so...
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Who didn’t see this coming? According to Kaiser Health News, employers are increasingly looking at the benefits of getting out of the health-insurance delivery process. Fueling this interest are ObamaCare-related spikes in health-insurance premiums, plus the opportunity to fix costs and reduce vulnerabilities presented by employees who develop serious health issues:

Can corporations shift workers with high medical costs from the company health plan into online insurance exchanges created by the Affordable Care Act? Some employers are considering it, say benefits consultants.

“It’s all over the marketplace,” said Todd Yates, a managing partner at Hill, Chesson & Woody, a North Carolina benefits consulting firm. “Employers are inquiring about it and brokers and consultants are advocating for it.”

Patients with preexisting medical conditions like diabetes drive health spending. But those who undergo expensive procedures such as organ transplants are a burden to the company as well. Since most big corporations are self-insured, shifting even one high-cost member out of the company plan could save the employer hundreds of thousands of dollars a year—while increasing the cost of claims absorbed by the marketplace policy by a similar amount.

And the health law might not prohibit it, opening a door to potential erosion of employer-based coverage.

“Such an employer-dumping strategy can promote the interests of both employers and employees by shifting health care expenses on to the public at large,” wrote two University of Minnesota law professors in a 2011 paper that basically predicted the present interest.

One did not have to be UM law professors to see this coming. We have pointed out these perverse incentives in the employer mandate since before Democrats put the ACA up for a vote. Barack Obama and his supporters insisted that “if you like your plan, you can keep your plan,” based in large part on the assumption that businesses would simply eat the exploding costs of mandate health insurance.

That, however, ignores the efficiency process and cost-benefit analysis that any business with a survival instinct uses. If it’s cheaper to pay the fine and dump the coverage, the only incentive that employers have to do otherwise is strictly competitive. And that will only last as long as the competition doesn’t make the same move. Once the first few employers looking to gain a tactical advantage on costs make the decision to get rid of that overhead, everyone else will follow to negate that advantage — and to push those costs off onto the federal government. That will make a hash of the carefully managed cost analyses offered by ObamaCare supporters, and subsidy payments will explode far past the ability of revenues within the ACA to keep pace.

By the way, we should start seeing this phenomenon in just a few months. Even though the White House pushed the open-enrollment date for 2015 to mid-November to avoid having an ObamaCare shock just before the election, these businesses have to decide on whether to keep coverage as part of their budgeting process for the next year — and that will take place long before November 15th. Employees will start noticing that their employers aren’t holding their usual private-sector open enrollments on October 1st, even if employers wait to give them the bad news until November. That will not motivate voters to rush out and support Democrats, to say the least.

This report comes at an opportune moment. Sylvia Burwell will testify this morning at 9:30 at a Senate Health, Education, Labor and Pensions (HELP) Committee hearing to discuss her nomination to replace Kathleen Sebelius as HHS Secretary, and to answer some questions about ObamaCare:


ALL of it here
Kaiser: Employers getting ready to dump workers into ObamaCare « Hot Air

 

[auditor0007]

well well say it aint so...
links in article at site

SNIP:





Who didn’t see this coming? According to Kaiser Health News, employers are increasingly looking at the benefits of getting out of the health-insurance delivery process. Fueling this interest are ObamaCare-related spikes in health-insurance premiums, plus the opportunity to fix costs and reduce vulnerabilities presented by employees who develop serious health issues:

Can corporations shift workers with high medical costs from the company health plan into online insurance exchanges created by the Affordable Care Act? Some employers are considering it, say benefits consultants.

“It’s all over the marketplace,” said Todd Yates, a managing partner at Hill, Chesson & Woody, a North Carolina benefits consulting firm. “Employers are inquiring about it and brokers and consultants are advocating for it.”

Patients with preexisting medical conditions like diabetes drive health spending. But those who undergo expensive procedures such as organ transplants are a burden to the company as well. Since most big corporations are self-insured, shifting even one high-cost member out of the company plan could save the employer hundreds of thousands of dollars a year—while increasing the cost of claims absorbed by the marketplace policy by a similar amount.

And the health law might not prohibit it, opening a door to potential erosion of employer-based coverage.

“Such an employer-dumping strategy can promote the interests of both employers and employees by shifting health care expenses on to the public at large,” wrote two University of Minnesota law professors in a 2011 paper that basically predicted the present interest.

One did not have to be UM law professors to see this coming. We have pointed out these perverse incentives in the employer mandate since before Democrats put the ACA up for a vote. Barack Obama and his supporters insisted that “if you like your plan, you can keep your plan,” based in large part on the assumption that businesses would simply eat the exploding costs of mandate health insurance.

That, however, ignores the efficiency process and cost-benefit analysis that any business with a survival instinct uses. If it’s cheaper to pay the fine and dump the coverage, the only incentive that employers have to do otherwise is strictly competitive. And that will only last as long as the competition doesn’t make the same move. Once the first few employers looking to gain a tactical advantage on costs make the decision to get rid of that overhead, everyone else will follow to negate that advantage — and to push those costs off onto the federal government. That will make a hash of the carefully managed cost analyses offered by ObamaCare supporters, and subsidy payments will explode far past the ability of revenues within the ACA to keep pace.

By the way, we should start seeing this phenomenon in just a few months. Even though the White House pushed the open-enrollment date for 2015 to mid-November to avoid having an ObamaCare shock just before the election, these businesses have to decide on whether to keep coverage as part of their budgeting process for the next year — and that will take place long before November 15th. Employees will start noticing that their employers aren’t holding their usual private-sector open enrollments on October 1st, even if employers wait to give them the bad news until November. That will not motivate voters to rush out and support Democrats, to say the least.

This report comes at an opportune moment. Sylvia Burwell will testify this morning at 9:30 at a Senate Health, Education, Labor and Pensions (HELP) Committee hearing to discuss her nomination to replace Kathleen Sebelius as HHS Secretary, and to answer some questions about ObamaCare:


ALL of it here
Kaiser: Employers getting ready to dump workers into ObamaCare « Hot Air

I have said for a long time that the best thing that could happen is for employers to get out of the business of providing health insurance to employees. It is the main reason costs have gone through the roof. One of the biggest problems with health insurance is that so many people do not actually have to pay the full amount for their insurance because their employers pay such a large percentage of the cost. If everyone actually had to pay the full premium, we would see some drastic changes overnight.