Until now, the mainstream media focus on ObamaCare’s blows has been on individuals and small businesses. But large employers will not avoid the costs of the Affordable Care Act (ACA). According to a new study published by the American Health Policy Institute:
- The cost of the ACA to large U.S. employers (10,000 or more employees) is estimated at $480 to $590 per employee per year, over the next ten years.
- These large employers will see overall ACA-related cost hikes of between $163 million and $200 million per employer, or an increase of 4.3 percent in 2016 and 8.4 percent in 2023 over and above what they would otherwise be spending.
- The total cost of the ACA to all large U.S. employers over the next ten years is estimated at between $151 billion to $186 billion.
Under the Affordable Care Act, between six and eleven million workers would increase their disposable income by cutting their weekly work hours. About half of them would primarily do so by making themselves eligible for the ACA’s federal assistance with health insurance premiums and out-of-pocket health costs, despite the fact that subsidized workers are not able to pay health premiums with pre-tax dollars. The remainder would do so primarily by relieving their employers from penalties, or the threat of penalties, pursuant to the ACA’s employer mandate. Women, especially those who are not married, are more likely than men to have their short-term financial reward to full-time work eliminated by the ACA. Additional workers, beyond the six to eleven million, could increase their disposable income by using reduced hours to climb one of the “cliffs” that are part of the ACA’s mapping from household income to federal assistance.
And if they did, who knew about it?
At the prodding of business organizations, House Republicans quietly secured a recent change in President Barack Obama’s health law to expand coverage choices, a striking, one-of-a-kind departure from dozens of high-decibel attempts to repeal or dismember it…
The provision itself was relatively minor. It eliminated a cap on deductibles for small group policies offered inside the law’s health care exchanges as well as outside; the cap was set at $2,000 for individuals and $4,000 for families…
No member of the House GOP leadership has publicly hailed the fix, which was tucked, at Republicans’ request, into legislation preventing a cut in payments to doctors who treat Medicare patients.
It is unclear how many members of the House rank and file knew of it because the legislation was passed by a highly unusual voice vote without debate. (AP)
The online insurance marketplace in Oregon is such a technological mess that residents have been signing up for health coverage by hand. In Texas, political opposition to President Obama’s health law is so strong that some residents believe, erroneously, that the program is banned in their state.
But in Connecticut, a smoothly functioning website, run by competent managers, has successfully enrolled so many patients that officials are offering to sell their expertise to states like Maryland, which is struggling to sign people up for coverage.
In some states that have expanded Medicaid, like Kentucky…the biggest chunk of the newly insured are Medicaid patients. More than 300,000 Kentuckians are enrolled in new health coverage, the state says, 80 percent of them through Medicaid.
In 2013, Rebecca Ryan of Fort Collins, Colorado, paid $375 a month to be insured by CoverColorado, the state’s plan for people who are uninsurable. When the state ended that plan on December 31, 2013, 14,000 people became uninsured and had to find ObamaCare plans.
Ms. Ryan went to the state exchange. The least expensive available option was a Kaiser-Permanente HMO that cost about $360 a month. Ms. Ryan says that it had a roughly similar deductible of $5,000 per person and total out-of-pocket costs of $6,350. Unlike Kaiser, however, CoverColorado allowed members to see any provider in the state.
The Kaiser plan did not include Ms. Ryan’s longtime physician. The only exchange plan that did that was a new, untested, Co-op plan that cost $526 a month. When asked, the exchange representative agreed that “they are going to penalize me because I want to keep my doctor.”
Keep in mind that CoverColorado charged individual premiums that were 137 percent of the “industry average,” calculated as weighted average of Colorado’s five largest individual health insurance carriers’ premiums, adjusted for benefit differences.
Ms. Ryan’s experience in the exchange suggests that ObamaCare may have raised Colorado’s average individual premiums by 37 percent.
Fresh from reimaging health insurance, mainstream health policy analysts have now set their sights on the way that people who provide medical care are reimbursed. Initial indications are that this will not go well for patients. Academics and government agencies seem imbued with the conviction that every medical procedure in America costs twice as much as it should due to “flat of the curve medicine,” and that vast fortunes can be saved simply by chopping reimbursements.
The table below lists Medicare’s 17 most expensive conditions. It is from a paper on reducing costs by changing Medicare payments from patient based payments to “bundled episode payments.” The authors argue that this reform could save $10 billion a year. They implicitly assume that higher average payments per patient “episode of care” in the 306 hospital referral regions that make up the upper 75th percentile of the payment distribution have no value. Given that, if one caps Medicare payments for each “episode of care” at the 25th percentile of the average cost per patient episode, one saves a great deal.
Someone, for example, earning $25K annually in Arizona will pay $2,424 in total monthly premiums for ObamaCare (10% of their annual income) and still be stuck with a $4,000 deductible and a $5,200 cap on their out of pocket costs. The same person in Illinois will pay $3,576 in annual premiums, and in low cost Texas $2,460.
What about the same 30 year old who now earns $30,000 annually — the average salary for a pre-school teacher according to census data? In Arizona, their annual cost for carrying the ObamaCare plan runs $2,772 and their deductible is $5,000. In Illinois, the same person will spend $4,092 for the same health plan, and also have a $5,000 deductible before their full health coverage kicks in.
Scott Gottlieb in Forbes and at AEI.