Updates
May 27, 2014:
Daily Ticker takes a look at this new rule; I comment on it; too early to tell how this will play out.
May 26, 2014: it looks like
the Obama administration / IRS have done an end-run around this little gambit. It will be interesting if this is the end of the story. This is very, very good news for existing employees. Not such good news for those looking for employment. On the other hand, now that the defines health care as part of one's salary, it's very possible companies could tie hourly wages and/or salaries to health care costs.
May 26, 2014:
hospitals starting to cut "charity" care, also being reported in
The New York Times.
Original Post
ObamaCare: CEOs Are Shifting Health Care Costs To Employees, Retirees
We've talked about this before. ObamaCare was never about the "30 million uninsured." ObamaCare was all about saving CorporateAmerica. The Department of Defense saw the coming trainwreck: but for the military, the trainwreck was not ObamaCare. The trainwreck for the military was the ever-increasing health care costs for active duty and retirees. Unfortunately for the military, that trainwreck is still coming.
The Department of Defense might have been the first to see the trainwreck coming, but Corporate America also saw that healthcare costs were unmanageable: a) rising quickly; and, b) unpredictable.
Hillary and Barry were able to change the discussion from how do we save Corporate America to how do we insure "30 million uninsured"? The answer was ObamaCare. Had Hillary won, it would have been HillaryCare. They already had RomneyCare in Massachusetts, so had he won ....
ObamaCare was never about insuring the "30 million uninsured." The proof is in the pudding, the number of folks who actually signed up for ObamaCare. A few million newly insured were eligible all along for Medicaid. ObamaCare might have signed up two million uninsured (and, of those, a million might pay their first month's premium). The president called it a major success; two million people signing up; and, then he fired the person who made it all succeed, Ms Sebelius.
ObamaCare did not sign up man of the 30 million uninsured, but ObamaCare will allow Corporate America to shift health care costs from the CEO to the employee and to the retiree.
Yahoo!Finance is reporting just that: employees are shifting the burden of health care to retirees --
If you expect your employer to help cover the cost of your healthcare in retirement, you may be unpleasantly surprised.
The
number of employers providing health benefits for retirees has been in a
state of steady erosion over the past few decades — dropping from 40%
of firms to 28% between 1988 and 2013, according to a new report by
the Kaiser Family Foundation. At larger companies (200+ employees) the
drop has been even more dramatic, falling from 66% to 28%.
As it stands, fewer than one in five employees work for a company that offers health benefits to retirees.
"It's hard to forsee a scenario where this trend will be reversed," says Trisha Neuman, senior vice president of the Kaiser Family Foundation and co-author of the report. "Employers
are making decisions on an annual basis on how they want to structure
their plans. They’re deciding what they’re willing to pay.”
The
root of the decline is simple enough: Healthcare is growing
increasingly expensive, and as retirees live longer each year, covering
their medical expenses will only grow costlier.
To
mitigate future costs, some firms are capping their contribution to
retiree health care, while others are tightening their eligibility
standards for coverage by raising minimum age and years-of-service
requirements. Newer hires may be excluded from coverage altogether. In a
recent survey
by Prudential Insurance Company of America, nearly half of 1,000
employers said they are considering moving to a defined contribution
model, which would cap their contribution to retiree health coverage at a
predetermined amount.
For
young retirees, the blow to retiree health benefits has been cushioned
by the implementation of the Affordable Care Act and the new healthcare
marketplace. In the past, retirees
who were too young to qualify for Medicare relied on employer-backed
health coverage to fill in their gap in coverage until they turned 65.
For investors: this is great news. Health care expenses are going to decrease dramatically by nimble firms dropping retirees from company health care plans.
