Why would they dump employee coverage? Because, under Obamacare, they are incentivized to do so. Obamacare imposes a penalty on companies that don’t provide coverage, but it is less than the cost of providing coverage. It is, in other words cheaper to pay than to play:
Many large companies are examining a course that was heretofore unthinkable, dumping the health care coverage they provide to their workers in exchange for paying penalty fees to the government.
Fortune Magazine acquired some of the documents requested by Democrat Henry Waxman pursuant to the write-downs companies were forced to do after analyzing the impact of Obamacare. And a variety of internal memoranda show that the big players are all reconsidering employee coverage:
AT&T produced a PowerPoint slide entitled ‘Medical Cost Versus No Coverage Penalty.’ A document prepared for Verizon by consulting firm Hewitt Resources stated, “Even though the proposed assessments are material, they are modest when compared to the average cost of health care.
The people who run Deere, Catapillar and a host of other companies are considering the same option. And many will opt to pay the penalties. Not only would that save them a lot of money, it would allow them to avoid a huge amount of regulatory red tape. But guess what happens to the cost of Obamacare?
By Fortune’s reckoning, each person who’s dropped would cost the government an average of around $2,100 after deducting the extra taxes collected on their additional pay. So if 50% of people covered by company plans get dumped, federal health care costs will rise by $160 billion a year in 2016, in addition to the $93 billion in subsidies already forecast by the CBO.
In other words, all those lies the President has been telling about the cost of Obamacare just became even more preposterous. This also reveals that tale he keeps telling about no one being forced to give up health insurance coverage to be another of his trademark whoppers.
How’s that change workin’ out for ya?
Post a Comment