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ACA Revisionism
Taxpayers Lose as Small Businesses Drop Insurance Coverage

The ACA is about to get more expensive. According to the WSJsmall businesses are increasingly opting to discontinue their insurance coverage for their employees, prompting those employees to purchase coverage on the ACA’s public exchanges. Since businesses that employ less than 50 people are exempt from the employer mandate, many of those dropping coverage will face no penalty for doing so. More:

In the latest sign of a possible shift, WellPoint Inc. said Wednesday its small-business-plan membership is shrinking faster than expected and it has lost about 300,000 people since the start of the year, leaving a total of 1.56 million in small-group coverage. […]

Some other insurers have flagged a similar trend. Aetna Inc. Chief Financial Officer Shawn M. Guertin said the company was seeing “some erosion at the bottom of the market” among employers with two to 10 workers. Kaiser Permanente is seeing “some contraction” in the small-group market, particularly in places where insurers are offering cheap individual plans, said Joe Smith, the nonprofit’s vice president for small business.

This trend is important for one key reason: many of these workers replacing employer coverage with plans purchased in the ACA’s individual market will receive federal subsides to offset the cost of their premiums. In fact, the WSJ story states that the biggest predictor for whether a company discontinues its employee health care is directly related to subsidies. Companies in “lower-income industries” are the ones most likely to push their workers onto the exchanges—and those same workers are the ones most likely to qualify for subsidies. The upshot is that the federal government could be forced to issue more subsidies than it expected, thereby raising the cost of the law to the taxpayer past what experts predicted at the time of the law’s passage.

That is just another way in which the law has changed in implementation, giving us a very different Obamacare than the one we were promised.

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  • Boritz

    Subsidies have been consistently sold as a benefit and nothing but a benefit.  Spokespersons for the ACA are quick and shameless to bring up subsidies and promote them as positive.  You must be mistaken that this is a some kind of problem.

  • Jacksonian_Libertarian

    The fact is that Obamacare was always just a bait and switch scam with a socialist single payer medical system as the real leftist goal.

    • Thirdsyphon

      Amen, brother! Hope that happens soon.

      • John Stephens

        Absolutely! Look at the OUTSTANDING job the VA is doing.

        • Thirdsyphon

          The VA isn’t “single payer” – it’s straight up socialized medicine, with the government in charge of both paying for and providing medical care. Single payer just means the government provides everybody with health insurance. . . think Medicare, but with an eligibility age of 0.

          • John Stephens

            The VA does that too, it’s called CHAMPVA. My wife and daughter use it, and it’s worse than Medicare.

          • Thirdsyphon

            So our veterans, too, would benefit from a national expansion of Medicare? The news just keeps getting better!

          • John Stephens

            In order for me to believe that anyone would benefit from a national expansion of single payer health care, I would have to have confidence in the Federal Government’s ability to do so effectively. Based on first hand observation, I have no such confidence.

          • Thirdsyphon

            Medicare itself seems pretty popular. . . the legislation to make it universal would be a single line: “Sec. 1811 of the Social Security Act is hereby amended by replacing Clauses (1), (2), and (3) with: ‘all persons residing in the United States of America'”

  • FriendlyGoat

    Why wouldn’t small employers and their associations be spinning this as something like a new tax cut for them, a reduction in their costs which supposedly allows them to hire more people? Would it be that, the lower the taxes, the greater the incentive to merely pocket any savings on people costs as net profit?

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