A new survey of Fortune 100 companies finds that the health care overhaul, contrary to the claims of its authors, created some perverse incentives for employers to drop workers from company insurance plans.
Republicans on the House Ways and Means Committee surveyed the top 100 companies about how much they spent on health care -- a total of 71, covering 5.9 million employees, responded. The results suggested it would be far more attractive for companies to drop workers from those plans than keep them.
Even after paying a penalty of $2,000 per employee, the companies stand to save $28.6 billion in 2014 alone by shifting employees to health insurance exchanges governed by strict federal standards. The companies stand to save more than $422 billion over the first 10 years of the law by doing this.
Yep. $2,000 is a pittance compared to what this coverage costs for most employees. And my personal and direct experience with this on a group negotiation basis was in the 1990s!
Look at the BS excuse here too:
"I think competition for labor is still intense and to recruit and retain a talented work force you've got to provide generous benefits," said Andrew Webber, president of the National Business Coalition on Health.
Money is money as an employee. The question is whether given the choice the employee will take the "platinum" plan you provided for them or whether they'd rather have the money and a less-generous plan -- or none at all!
Businesses will be dropping people like flies from business-covered "insurance"; there will be no reason for anyone as an employer to be providing this "benefit" into an environment where insurance prices will double - and probably double twice - in the next four years. If you think not, look at what was done to credit-card holders in front of the provisions of the CARD act going into effect.
I love it when I'm right.
Incidentally, my view comes from the fact that I'm healthy. Those who are sick will see it differently.
Now consider this as a further factor: As an employer do you want healthy employees or sick ones?
(Do you folks in DC really think that employers are so stupid that they will not use this tool to select for healthy workers and get rid of the more-sickly ones -- entirely legally? Like hell they won't.)
Where We Are, Where We're Heading (2013) - The annual 2013 Ticker
The content on this site is provided without any warranty, express or implied. All opinions expressed on this site are those of the author and may contain errors or omissions.
NO MATERIAL HERE CONSTITUTES "INVESTMENT ADVICE" NOR IS IT A RECOMMENDATION TO BUY OR SELL ANY FINANCIAL INSTRUMENT, INCLUDING BUT NOT LIMITED TO STOCKS, OPTIONS, BONDS OR FUTURES.
The author may have a position in any company or security mentioned herein. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.
Looking for "The Best of Market Ticker"? Check out Ticker Classics.
Market charts, when present, used with permission of TD Ameritrade/ThinkOrSwim Inc. Neither TD Ameritrade or ThinkOrSwim have reviewed, approved or disapproved any content herein.
The Market Ticker content may be reproduced or excerpted online for non-commercial purposes provided full attribution is given and the original article source is linked to. Please contact Karl Denninger for reprint permission in other media or for commercial use.
Submissions or tips on matters of economic or political interest may be sent "over the transom" to The Editor at any time. To be considered for publication your submission must include full and correct contact information and be related to an economic or political matter of the day. All submissions become the property of The Market Ticker.