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Thursday, November 14, 2013

Under-Reported/Unreported Story: Number of Corporations Cost Shifting Their Employees To ObamaCare

I track this story elsewhere.

One of the problems with American health care that Congress and the administration fixed was the inability of American corporations to plan for their health care costs going forward.

Corporations never knew what their premiums would be for their employee health care programs for the next year, the following year, and the next year after that. All they knew was that they could expect a five percent (5%) to 20 percent in their company premiums each year.

Corporations that don't take advantage of ObamaCare will continue to have the same challenge; it may, in fact, get worse when insurers are forced to cover (subsidize) their "individual" policies with corporate health premiums.

It is obvious to all (except perhaps Nancy Pelosi and Lawrence Summers) that the individual policy premiums will preclude 80% of Americans from buying them due to the high cost and even higher deductibles ($12,000 annual deductibles seem to be the norm).

Insurers will be mostly covering those with high medical expenses (the lifetime medical cap has been eliminated). The math doesn't work. So, they will rely on corporate policy premiums to subsidize their individual health care divisions.

Corporations can expect that annual premiums will increase significantly when the numbers are released in 2014 (remember, the "employer mandate" was delayed one full year).

Many blue-chip corporations have taken advantage of ObamaCare. They have dialed in their expenses for as far out into the future as they want. They will end their company-sponsored health care programs and simply provide each of their employees with $400/month (or whatever number you want to put there) and tell folks to enroll on the ObamaCare exchange. The president has told us that less expensive policies are out there, "shop around."

So, sometime next year, probably late summer, early autumn, we will start to see a stampede of companies cost-shifting their health care costs. Many have already done so or announced their intentions. See the link above.

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