Businesses Will Drop Health Care Coverage Under Obamacare

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According to the Wall Street Journal, there’s a lot of uncertainty about whether or not businesses will keep their health insurance coverage for employees once Obamacare makes that coverage more expensive to provide.

Around one in 10 employers in the U.S. plans to drop health coverage for workers in the next few years as the bulk of the federal health-care law begins, and more indicated they may do so over time, according to a study to be released Tuesday by consulting company Deloitte.

The majority of Americans under age 65 who have health insurance get it through an employer. A big question about the law is whether companies will continue to offer coverage after a slate of changes starting in 2014 will give Americans more options for buying coverage without the help of an employer. …

Deloitte’s findings differ from estimates by rival firm McKinsey & Co. last year that found 30% of employers say they would “definitely or probably” stop offering health insurance after 2014, as well as calculations by the Congressional Budget Office that estimated around 7% of workers could lose coverage under the law by 2019.

In all, 9% of companies in the Deloitte study said they expected to stop offering insurance in the next one to three years. Around 81% were planning to continue providing benefits, and 10% weren’t sure.

Not surprisingly, it’s small businesses that will bear the brunt of the new requirements, though there is some fear of speaking out about the future of health insurance among companies:

Employers, especially large companies, have been reluctant to talk openly about their coverage plans for 2014. A few small firms have testified before Congress that they are thinking about dropping coverage.

Those differences were visible in the latest findings. Fewer than 2% of companies with more than 1,000 workers said they were considering dropping coverage. Companies with 50 to 100 workers were most likely to say they would drop coverage, with 13% of them saying they expected to do so in the next one to three years.

Only 16% of respondents said that they would be likely to stop offering health benefits if their competitors did.

Rather than any conclusive numbers on how many businesses will or will not keep their coverage, I think what this tells us is that there is a lot of uncertainty out there. Obamacare, which was supposed to make health insurance cheaper and easier to get, is actually making it more expensive and harder to obtain. Even for businesses.

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Rob Port is the editor of SayAnythingBlog.com. In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters. He writes a weekly column for several North Dakota newspapers, and also serves as a policy fellow for the North Dakota Policy Council.

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