While selling his healthcare overhaul, Obama repeatedly reassured skeptics with a promise: If you like your current plan, you can keep it. Some workers may soon find out this isn’t exactly true. As companies, particularly small businesses, face rising healthcare costs under the new law, consultants are beginning to advise them to drop healthcare when the new exchanges go into effect in 2014. The Wall Street Journal has the story:
Whether the health-care overhaul will prompt employers to drop their health insurance is a subject of intense debate. Several studies have found that most employers don’t expect to do so once workers have the option of buying policies through insurance exchanges, set to begin in 2014. But consultants say employers with lower-wage workers may be more likely to shift workers to exchanges. . . .The committee reported that Southwest Airlines said in its employee magazine of June 2010 that it expected the law to increase its costs. At a presentation made to Southwest in July 2011, benefits consultant Mercer told the company that under the new system it could expect to pay $414 million a year to provide health care for workers, or drop coverage entirely and instead pay $111 million in penalties.
Thus far, no major company has said that it plans to drop health coverage for its workers, despite the potential for savings. Yet these reports should still be very troubling to the law’s supporters. If Mercer’s calculations are right, a number of companies stand to gain significantly by dropping coverage. Once the exchanges are up and running, companies may find these savings harder to resist, especially if they run into financial difficulties.It is still too early to say exactly what impact such a massive law will have on one of the most complex healthcare systems in the world. But it’s sure to be a bumpier ride than the president has let on.