There are winners and losers under Obamacare. In the short-term the winners are the uninsured, the high risk people, those on Medicaid and to a lesser extent those on Medicare. Over the longer term these folks will feel the pinch of higher premiums, and shrinking access to a large network of health care providers. As things are developing, perhaps quicker than anticipated, the real losers are the tens of millions of Americans with employer-based health care benefits. This includes both active and retired employees. That coverage will rapidly disappear or benefits will be reduced considerably.
Obama likes to talk about keeping your doctor and the health plan you like while seeing premiums shrink (not so much anymore though). The reality is that coverage you like won’t be available, your choice of doctors may be limited and if your premiums decline it’s only because your out-of-pocket costs have increased considerably.
The real silent killer for employees and retirees is the move to the defined contribution by employers. Gone will be the employer paying a percentage of the health insurance premium to be replaced by a fixed amount that does not increase or increases at some rate less than the growth in health insurance costs (premiums). The balance, of course, is up to the employee. In some cases the employer will base its contribution on the least expensive option available and it will be up to the worker to buy back the coverage they may have currently.
What I thought would originally take many years to effect all but the most generous health plans like those of state government workers, has employers in a panic now. Employers are making changes today in an effort to avoid the so-called 40% Cadillac tax on employer health plans. In a very real way this Obamacare tax is shifting more costs to workers without regard to income levels.
Obamacare did not only change health care, it is also changing the workplace. Some economists believe that as employers decrease what they spend on health care, that money will reappear as higher wages. Stand by on that one.
Moreover, data from existing surveys indicates that employers are quickly moving to high-deductible plans with health savings accounts, away from more expensive plans with high premiums, but low deductibles and co-pays. Notably, when employees are offered a “defined contribution” – a fixed amount of money from their employers with which to shop – they also (although not always) opt for more high-deductible options. Let’s give credit where credit is due. Obamacare has undoubtedly accelerated interest in private exchanges by spurring investment and discussion of the public insurance exchanges mandated under the law. That’s the carrot, so to speak, attracting companies towards private exchanges. The “stick” is Obamacare’s “Cadillac Tax”, which will hammer companies with a 40 percent excise tax beginning in 2018 if their plans cost more than a fixed amount – an amount that is set to grow more slowly than medical inflation traditionally has. Combined, these forces are driving companies toward a “defined contribution” strategy where they will offer employees a set amount with which to shop for insurance through an online marketplace – an exchange. (The other alternative would be to just move your employees en masse into high deductible plans, perhaps while kicking in some money for an HSA.) via Obamacare Is Killing Traditional Employer-Sponsored Health Insurance – Forbes.
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