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Bankrupt Health Care
NYT: Under the ACA, Employees Find Insurance a Hard Sell

Even after the ACA has gone into effect, many employees are reluctant to purchase the insurance their employers offer. That’s the claim a new NYT article makes, as it rounds up the “growing” evidence that many Americans don’t find employer-sponsored insurance, for which the law does not offer subsidies, all that affordable. More:

But 10 months after the first phase of the mandate took effect, covering companies with 100 or more workers, many business owners say they are finding very few employees willing to buy the health insurance that they are now compelled to offer […]

“Based on what we’ve seen in the marketplace, we’re advising some of our clients to expect single-digit take rates,” said Michael A. Bodack, an insurance broker in Harrison, N.Y. “One to 2 percent isn’t unusual” […]

Around 7.5 million taxpayers paid the fine, according to a preliminary report by the Internal Revenue Service. That is significantly more than the three million to six million the government had forecast.

The ACA counts an employer-sponsored insurance plan for an individual as affordable if it costs no more than 9.5 percent of the individual’s household income. But even at those rates, many appear to be forgoing coverage. As the NYT notes, low take rates can create challenges for small businesses, because it can mean that only the employees with more serious health care needs buy the policies, triggering insurer fears about the sustainability of the company’s pool.

The ACA’s third open enrollment window for the individual market will open on November 1, and the website is once again experiencing technological problems in the run-up. But the bigger problem, whether we are talking about employer-sponsored insurance or the individual market, remains the same: Health care in this country was too expensive before the ACA and it remains too expensive now.

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  • Andrew Allison

    You don’t suppose that having one-or-more “independent” health insurance companies in each of the fifty states, all offering the same mandated coverage and guaranteed a 25% return has anything to do with the cost of insurance???

  • Jim__L

    And so the “death spiral” begins…

    You know, the syllables “I told you so” map rather neatly onto the fundamental rhythmic motif of Beethoven’s Fifth Symphony. You can hear that common thread in multiple layers in all four movements (though by the last movement Beethoven plays with it a lot.)

    Taking a formalism like that and building it into such a complex, beautiful piece of music is an act of genius.

    ACA, not so much an act of genius.

  • Boritz

    “Around 7.5 million taxpayers paid the fine…”

    That will work for a while, but the fine is going to become prohibitive — by design.

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