Wednesday, July 25, 2012

One in 10 U.S. employers to drop health coverage under ObamaCare, study finds

According to a new study by Deloitte, about one in 10 employers in the U.S. plans to drop health coverage for workers as ObamaCare goes into effect over the next few years - and even more than this said they may also drop coverage over time. 

Most Americans with health insurance who are under 65 years old get coverage from their employer and most companies offer this benefit as a way of recruiting top talent. Critics of ObamaCare say the federal law will prompt more companies to drop coverage as it becomes more expensive. But some businesses may be tempted to drop coverage because the penalty is less expensive than providing coverage to employees. But you can be sure that penalty will not stay at the starting rate. The government is trying to guide people into the national plan and then they will kill business with taxes to support it. 

Those who think ObamaCare will reduce costs by expanding coverage often cite Canada as an example of a successfully run healthcare system. But a 2011 report by the Fraser Institute concluded that Canada’s healthcare system is spending at an unsustainable rate. Six of ten Canadian provinces are on track to spend half of their revenues on healthcare, according to the institute.

“We conclude that Canada’s health system produces rates of growth in health spending that are not sustainable solely through redistributive public financing,” the report stated.

In 2011, healthcare spending consumed 50 percent of revenues in Canada’s two largest provinces, Ontario and Quebec. By 2017, four more provinces — Saskatchewan, Alberta, British Columbia and New Brunswick — will spend half of their revenues on healthcare, according to the institute. Meanwhile, total federal, provincial and territorial government health spending has grown by 8.1 percent annually, while the national GDP in Canada rose by only 6.7 percent during the same period.

In response to the rapidly rising costs, provincial governments have raised taxes and rationed care, increasing patient wait times. Provincial drug plans have also more often refused to pay for most of the drugs that are certified as “safe and effective” by Health Canada. This could explain why so many Canadians cross the border to come here for real access to healthcare. Too bad that will all change if America's health system goes even remotely the way of Canada.

If our politicians had really been interested in reducing healthcare costs, why wouldn't they allow even one meaningful bit of tort reform in the Affordable Care Act? Politicians may think the Act is great (after all, look at the huge tax windfalls they're anticipating) but if it's really such a great thing for Americans, why did the politicians make sure they were exempt from having to participate in ObamaCare?

Like the old adage goes, if it looks too good to be true, it probably is. It seems the only one who stands to win in the end is the government - even though that won't be sustainable for long. 

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  1. This is not a great news for the employees. Having health insurance may be one of the things that keeps them on their current jobs.

    1. Tina - you are completely right. Another Big 4 firm came out with their annual CEO study a few months ago and one of the biggest concerns CEOs have is not only finding the right employees, but keeping them. Offering generous benefits packages is one of the main things that helps keep good employees. ObamaCare will make employer health coverage a thing of the past. That is, if he wins reelection in Nov. No matter how you might feel about Romney, at least he vows to repeal ObamaCare - and if we get more republicans in the Senate and retain the House, we'll have the best chance for repeal of this awful health care legislation.

  2. Let's also remember that under provisions of ObamaCare, those of us using Medicare will have our monthly premiums, which are deducted from Social Security payments, raised from $96 per month to $240 a month in the year 2014. There is also going to be an incremental increase in 2013. Meanwhile the law also calls for a decrease of over $535 billion in Medicare expenditures and government panels to decide which treatments should be allowed and to whom. As one grows older the chances of receiving treatments will be diminished.
    Thank you Julie for keeping this issue open in the minds of your readers.