Report: Employers Stand to Gain Billions by Dropping Health Insurance
A new report from the House Ways and Means Committee tabulates the financial benefits for the nation's top 100 employers of dropping health insurance benefits, shifting 10.2 million employees into the taxpayer subsidized health insurance exchanges mandated under President Obama's law.
At the website of Sen. Jim DeMint (R-SC), Chris Jacobs writes, summarizing the report:
71 of the nation’s largest employers could save over $28 billion in 2014 alone, and $422.4 billion over a decade, by deciding to drop health insurance coverage for their 10.2 million employees and dependents and paying the $2,000 per-employee penalty instead.
The average savings per firm from dropping coverage amounts to more than $400 million in 2014 alone, and $5.9 billion over a decade.
The average savings per employee from dropping coverage amounts to $4,821 in 2014, and just under $10,000 in 2023.
84% of responding firms indicated they expect costs to rise faster than they have over the past five years – their past insurance costs rose 5.9%, while they expect future costs to rise 7.6%.
This morning’s report further reinforces the numerous prior studies, papers, briefs, reports, employer questionnaires, consultant presentations, surveys, op-eds, interviews, quotes, and comments from other prominent Democrats suggesting that employers will drop coverage in numbers far greater than the White House lets on.
The obvious effect of such a mass employer dumping of health insurance would be a massive increase in the cost of the taxpayer subsidies provided through the exchanges. The effect of such an increase on the costs of Obamacare are, of course, dramatic and impossible to estimate. While some, including the Congressional Budget Office, assume that the subsidies will be paid for by increased wages for those who no longer have insurance benefits, that has not been the experience in Massachusetts according to the latest research.