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More Healthcare Woes

The new health care law wasn’t supposed to undercut employer plans that have provided most people in the U.S. with coverage for generations, but what the Obama regime doesn’t want to talk about especially with the mid-term elections so near is that more and more employers are considering cutting employer healthcare plans.

That’s just not going to happen, White House officials say.

But as more and more corporations crunch the numbers, it’s looking more like the regime once again over sold and under delivered on the Healthcare bill.

Two provisions in the new law are leading companies to look at their plans in a different light.

One is a hefty tax on high-cost health insurance aimed at the most generous coverage. Although the “Cadillac tax” doesn’t hit until 2018, companies may have to disclose their exposure to investors well before that. A Boeing spokeswoman said concerns about the tax were partly behind a 50 percent increase in insurance deductibles the company just announced.

The tax is 40 percent of the value of a plan above $10,200 for individual coverage and $27,500 for a family plan. Family coverage now averages about $13,800.

Second, the health insurance tax credits available through the law are keyed to relatively Spartan insurance plans, not as generous as most big employers provide. Send your workers into the insurance exchange, and valuable employees might jump to a competitor that still offers health care.

White House adviser Furman said blaming a cost increase next year on a tax that won’t take effect for eight years “stretches credibility very far past the breaking point.”

But if that was true, why are so many insurers raising rates so quickly now to help pay for provisions that haven’t even taken affect?
Tennessee Gov. Bredesen said last week that employers could save big money by dropping their health plans and sending workers to buy coverage in the exchange. They’d face a fine of $2,000 per worker, but that’s still way less than the cost of providing health insurance. Employers could even afford to give workers a raise and still come out ahead, Bredesen wrote in a Wall Street Journal opinion piece.

Employers are actively looking at that. “I don’t know if the intent was to find an exit strategy for providing benefits, but the bill as written provides the mechanism,” said Deloitte’s Keckley, the consultant.

But big questions loom over the new insurance markets that will be set up under the law.

They’re called exchanges, and every state will have one in a few years. Consumers will be able to shop for coverage among a range of plans in the exchange, with a guarantee they can’t be turned down because of an existing medical problem. To help make premiums affordable, the law provides tax credits for households making up to four times the federal poverty level, about $88,000 for a family of four.

But that just creates the same problem as stated above. It may be hard to retain workers who jump ship to a company that has employer paid health insurance. Is it your fault that your company cannot afford the governments plan?

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