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Monday, December 30, 2013

Top Automobile Dealership Shifts Insurance Costs To ObamaCare

I think I've been pointing this out ever since the law was passed.

Cost shifting.

I track the cost-shifting story elsewhere.

For Wall Street, ObamaCare is great news.

For Main Street, not so good.

For investors, ObamaCare gets the unpredictability and spiraling health care costs off the company's books.

Companies are going to do exactly what Extreme Dodge, Jackson, Michigan, is doing:
... when employees were told that the health insurance plan that the auto dealership had provided its workers was canceled because it doesn’t comply with the Affordable Care Act, better known as Obamacare.
Rather than officially sponsor a new policy, the company -- voted one of the 100 best car dealerships to work for in the country last year -- will instead provide its employees with $2,400 apiece to buy their own insurance, or to pocket and pay the new federal penalty if they elect to go without it.
That’s a little bit more than the company says it spent on health insurance this year.  Dealership owner Wesley Lutz said his decision to go in a new direction was driven by the fact that health insurance is “incredibly expensive” and getting more so. He says he needs to be able to control his future costs.
“As a business owner, we have to be viable first and then provide services,” he said. Lutz is not required to provide health insurance to workers, but has done so for 35 years.
 How bad are spiraling health care costs with the Affordable Health Care Act? Again, the article:
Insurance broker Michael Harp said small businesses, part of what’s known in the industry as the “small group market,” are used to seeing health insurance premiums climb about 10 percent a year, but it’s never before been this dramatic. 
For Extreme Dodge to have kept deductibles and out-of-pocket costs at last year’s levels, he said, would have cost the dealership almost 50 percent more than last year.
The story has a hundred story lines. Another one -- the act of civil disobedience. By law, everyone must carry health insurance under ObamaCare:
Four younger workers opted not to sign up for any health insurance at all, according to a company official. 
Four works out of 26. That is 15 percent, and my hunch is that about 15% of the overall general population will not enroll in ObamaCare. It could be significantly worse: the next time you visit a Wal-Mart, or a Target, or a grocery story of your choosing, look around, and think for yourself how many of those you see shopping actually know how to enroll in ObamaCare electronically. Scary, huh?

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