Everything you know about employers and Obamacare is wrong
By Ezra Klein, WashPost, Updated: May 24, 2013
Health Reform Watch, Sarah Kliff’s regular look at how the Affordable Care Act is changing the American health-care system, is being written by Ezra Klein today. Sarah, unfortunately, is doing some firsthand reporting on America’s dental system. You can reach Sarah with questions, comments and suggestions here. Check back every Monday, Wednesday and Friday afternoon for the latest edition, and read previous columns here.
For all the speculating in Washington about how the Affordable Care Act will work — much of it, I admit, from me — there’s been too little attention given to the best evidence we have on the subject: How the extremely similar reforms in Massachusetts have worked.
Take employers. There’s real concern that companies will see the Affordable Care Act as an opportunity to drop health insurance for their employees and let taxpayers pick up the tab. For those with more than 50 full-time workers, that’ll mean paying a $2,000 to $3,000 penalty for each one, but that’s a whole lot cheaper than paying for health insurance.
The Massachusetts reforms, if anything, were even friendlier to this sort of dumping. The penalty for employers was a paltry $295 per worker. Compared to the average cost of an employer-provided health plan in the Northeast — $17,099, according to the Kaiser Family Foundation’s 2012 Employer Health Benefits Survey — that’s a pittance. It seemed almost irrational for employers to keep offering coverage.
“The benefits we were giving guys who left employer-sponsored insurance were way more generous than what the federal plan gives them,” says MIT’s Jonathan Gruber, a health economist who helped design the Massachusetts reforms. “And we didn’t have much of an employer penalty. I predicted employers would drop coverage.”
(More here.)
Health Reform Watch, Sarah Kliff’s regular look at how the Affordable Care Act is changing the American health-care system, is being written by Ezra Klein today. Sarah, unfortunately, is doing some firsthand reporting on America’s dental system. You can reach Sarah with questions, comments and suggestions here. Check back every Monday, Wednesday and Friday afternoon for the latest edition, and read previous columns here.
For all the speculating in Washington about how the Affordable Care Act will work — much of it, I admit, from me — there’s been too little attention given to the best evidence we have on the subject: How the extremely similar reforms in Massachusetts have worked.
Take employers. There’s real concern that companies will see the Affordable Care Act as an opportunity to drop health insurance for their employees and let taxpayers pick up the tab. For those with more than 50 full-time workers, that’ll mean paying a $2,000 to $3,000 penalty for each one, but that’s a whole lot cheaper than paying for health insurance.
The Massachusetts reforms, if anything, were even friendlier to this sort of dumping. The penalty for employers was a paltry $295 per worker. Compared to the average cost of an employer-provided health plan in the Northeast — $17,099, according to the Kaiser Family Foundation’s 2012 Employer Health Benefits Survey — that’s a pittance. It seemed almost irrational for employers to keep offering coverage.
“The benefits we were giving guys who left employer-sponsored insurance were way more generous than what the federal plan gives them,” says MIT’s Jonathan Gruber, a health economist who helped design the Massachusetts reforms. “And we didn’t have much of an employer penalty. I predicted employers would drop coverage.”
(More here.)
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