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No Advantage for Employers to Drop Group Health Insurance Under PPACA

By frankbshouse   Follow   Wed, 11 Jul 2012, 11:40am   367 views   1 comment
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http://www.businesswire.com/news/home/20120703005806/en/Truven-Health-Analytics-Study-Finds-Short--Long-Term

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1. frankbshouse Follow Befriend 1 threads 11 comments

   1   3:40pm Wed 11 Jul 2012   Share   Quote   Permalink   Like   Dislike   Ruki says The prices for group plans will go up as a result. Interesting thought. Maybe you can clarify something for me. Since most large employers are self-insured, (essentially paying claims on their own), how would this affect the price of group health plans? I read the report as employers have the following choices: 1. Employer keeps group health plan coverage for their employees. Average cost is $8,269 per employee. (Based on the statement of $17,269 - $9,000.) 2. Employer subsidizes employees into a Federal program. Average cost could be as high as $17,269 per employee. 3. Employer cuts benefits and does not subsidize a Federal exchange program. Average cost would be $2,000 per employee. Clearly, option 3 is the cheapest for an employer to choose, but are they going to retain employees by cutting coverage? The study argues they would lose employees because it is like taking a $16,000 pay cut for the average employee. It’s a warm and fuzzy thought that employers don’t want to lose their employees over cuts, but realistically most employees don’t have other options. With the lack of jobs, employers have many employees cornered. Sadly, what I see could very well could happen is many employers opt out of providing Group Health Plan insurance and pay no subsidy to employees for federal coverage. Employees then can’t afford to pay the premiums for a federal program and go without insurance. They then have to pay the penalty for not having insurance. So in the end this could end up with the majority who actually had insurance not only ending up with no insurance but have to pay a penalty for not having it as well. Mass strikes in the future? Hopefully not though. I think the report is interesting and makes good points, but I guess we will have to wait and see what develops.