Is employer-sponsored health insurance on life support?
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(CBS/AP) Is employer-sponsored health insurance on life support?
A new survey shows that one out of every 10 midsized and large companies say they'll stop offering health insurance once federal insurance exchanges kick off in 2014, according to the survey, which was conducted by consulting firm Tower Watson.
That number may grow, since the survey found an additional 20 percent of the companies still don't know what they're going to do.
"With so much still unknown regarding both the short- and long-term impact of health care reform, most employers will not make wholesale changes to employer-sponsored health plans in 2012," Tower Watson's Ron Fontanetta, said in a written statement. "However, a small group of employers is driving more fundamental change in 2012."
Employer-sponsored health insurance has long been the staple of the U.S. health insurance system. But the survey suggests some employers feel they might be better off paying fines and taxes than continuing to provide benefits, which takes money away from their budgets.
The federal exchanges - devised under the health care overhaul - aim to provide a marketplace for people to buy government-subsidized insurance based on income levels.
Most employers expect to continue offering benefits once the exchanges start. But former insurance executive Bob Laszewski said he was surprised that as many as 8 or 9 percent of companies already expect to drop coverage a couple of years before the exchanges start.
"Dropping coverage is going to be very difficult for these (companies) to do," said Laszewski, a consultant who was not involved with the studies. Such a move, he said, comes with potential payroll-tax headaches and could subject firms to fines, while also cutting employee's compensation if companies refuse to up their salaries to account for the insurance cuts.
Towers Watson's Randall Abbott said the survey results can't be viewed as a final decision. There are still many unresolved variables, and companies may change their thinking once they learn more about the overhaul.
"2012 will ultimately be a defining year - the year some employers head down a path of bold and decisive actions, while others will wait and see," Randall said in the statement.
The health care overhaul also faces court challenges, and President Obama is up for re-election next year, two more variables that could shape what happens in 2014.
The Obama administration, however, took issue with the Towers Watson survey, pointing out studies by the nonpartisan Congressional Budget Office and nonprofits like Urban Institute that reached different conclusions.
An Urban Institute study projected overhaul will barely effect employer-sponsored insurance. When lawmakers debated the legislation, the CBO projected it would only have minimal impact on employer plans. About 3 million fewer people would be covered through work, but they'd be able to get insurance elsewhere.
Health and Human Services spokesman Richard Sorian said the administration expects to see a rise in employer-sponsored health insurance - not a decline.
"History has shown that reform motivates more businesses to offer insurance," said Sorian. "Health reform in Massachusetts uses a similar structure, and the number of people with employer-sponsored insurance in Massachusetts has increased."
But according to Dick Powers, a spokesman for the state health care agency Massachusetts Health Connector, the total is flat. He said the number of people with employer-sponsored coverage climbed after Massachusetts enacted reform in 2006 but have dropped back to pre-reform levels since the economy tanked in 2008.
The percentage of employers in the state that offer their workers health insurance has risen from 69 percent before reform to 77 percent.
Companies that drop coverage likely will be those that have a low percentage of workers enrolled in their plans and high staff turnover, Abbott said. This could include retail or hospitality businesses - for those companies, benefits are not crucial to retaining workers, and their employees may find better options on the exchange.
"Health care is high-cost, fast-growing expense they would like to eliminate," Abbott said.
Last year, the average annual health insurance premium for employer-sponsored family coverage was $13,770 per worker, with companies picking up most of that tab, according to the Kaiser Family Foundation and Health Research and Educational Trust.
More than 50 million Americans are uninsured, including 7 million children.
Visit HealthCare.gov to learn more about health insurance.
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What passed is almost exactly what they had proposed in 1993 as an answer to Hillarycare.
The flip-flopping Repub party was FOR it - including the mandate - before they were against it.
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One will always be able to purchase additional insurance to upgrade to better healthcare facilities. Employers will be able to offer enhanced healthcare plans to employees. This is possible in all European countries and the United States is no less capable. The basic healthcare in other countries is very acceptable and in many cases superior to the United States where long lines in emergency rooms are a problem. Many ex-pats utilize it to save money. Rush Limbaugh goes to Costa Rica for his healthcare and oxycontin.
1) Americans are all about choice. Where is the choice in a single payer government run health care system?
2) Have you ever experienced the nightmare of dealing with a non-responsive federal agency?
3) Do you really want the same entity that runs the IRS to run your health care? If you think private companies show little compassion, you haven't seen anything yet.
4) Do you really want to leave yourself with no recourse, should you be unhappy with what is provided by the federal government? Single payer, is single payer. No alternative provider, is no alternative provider. Today, we have the option of leaving one provider for another. That option would be gone.
5) Have you really taken a look at how the federal government is already providing health care? Military personnel were promised Tricare for life. After millions of Americans spent a career in the US military, the federal government has "changed it's mind". At 65, military retirees are now dumped off Tricare and onto a more expensive system - Medicare. Speaking of Medicare, it is an example of how badly the US federal government can run a health care system. It has been so badly mismanaged that it is in danger of going bankrupt, and many doctors are refusing to even take Medicare patients.
I want no part of a government run single payer health care system. I want that horrible health care law repealed. A stinking law that was not about providing better and less expensive health care for Americans. Instead, it was simply a political tool to make private health care too expensive for Americans and too expensive for business to provide to employees. It was nothing but a political tool by progressives to expand the power of the federal government to even take control of health care of American citizens. It makes me sick.
Health care is not a right... it is a privilege. (to understand the difference, imagine living in the middle of nowhere by yourself... the few things you have are rights and everything else is a privilege. Work, retirement,food, friends, money, doctors, etc are ALL privileges. Life, liberty and the pursuit of happiness are all rights) The problem is that the government is trying to make it a right AND it is treating the symptoms instead of the disease (just like everything else it does). The problem is the cost of healthcare itself.
Litigation and malpractice costs, bulky regulation costs, paying for everyone, expenses involved with training of doctors and nurses, and even the abuse and misuse of the system are all problems. Now add the insurance company methods of dealing with these same costs and you have a recipe for disaster!
Each of these issues CAN be addressed... but they are ignored. Add the government into the mix with their waste and incompetence and their willingness to take over even the most simplistic functions in a persons life (as well as their infamous ability to "screw up a wet dream") and things will NOT get better.
The most effective method that I have seen for paying is NOT insurance, but rather Health Savings Accounts. The INDIVIDUAL saves the money, pays the bills, and deals directly with the doctor bills. Yet this is outlawed under the federal health care bill.
Thanks to this health care debacle, my expenses have at a minimum doubled (nearly tripled) and I have LESS coverage (due to things being outlawed) than I had before... this is improvement?
This was always the problem with the 1990's Republican approach to healthcare costs (which by the way what Obamneycare is). You can blame Obama; but the plan is exactly what Republicans proposed in response to Clinton-care.
mafia-organized ponzi scheme too.
No matter though, this phoney bill will be repealed once we get our conservative POTUS elected in 2012!
slow, you're going to have to show me a republican proposal that makes government healthcare mandatory, requires it to be paid by an additional tax with failure to pay punishable by law.
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Slept through the 90's, eh?
Look up Republican health care 1993