When Obama was campaigning on behalf of his health care law one mantra was repeated ad nauseam: If you like your current plan, you can keep it. To put it gently, this hasn’t turned out to be the case, as more and more employers are opting to drop health coverage for their employees, pushing them onto the insurance exchanges. We’ve already covered the grocery chain Wegmans going this route; now IBM has announced plans to push more than 100,000 retirees off the company health plan and onto Medicare exchanges. The Wall Street Journal reports:
Instead of subsidizing retiree health premiums directly, IBM will give retirees an annual contribution via a health retirement account that they can use to buy Medicare Advantage plans and supplemental Medicare policies on the exchange, as well as pay for other medical expenses. Retirees who don’t enroll in a plan through Extend Health won’t receive the subsidy. […]Few employees can now count on big companies to provide retirement health care. Only 28% of large companies that offer health benefits to employees offered retiree coverage in 2013, down from 34% in 2006 and 66% in 1988, according to a 2013 survey by the Kaiser Family Foundation.
This is huge. Far from being a status quo law, Obamacare has become a weapon of mass destruction against traditional employer plans.From one point of view, this may not be such a bad thing. A number of wonks on both the right and the left have argued that employer-based insurance is actually a bad thing. It’s certainly true that employer-based plans tie workers to their jobs at a time when our economy increasingly needs to be characterized by entrepreneurialism and rapid change.But this, unfortunately, was not how the ACA was sold to the public, and Americans who believed the administration’s sales pitch are soon going to notice and be none too pleased. When this happens, the blowback will generate another wave of reform that might end up undoing some of the ACA’s genuinely good points.