Thursday, November 21, 2013

When the Second (HI Coverage) Shoe Drops

Earlier I wrote about 20+ million people who will lose employer health insurance coverage, even though that coverage was "adequate" under the standards of the Affordable Care Act.

The federal government estimated that millions of people (see 75 CFR 34553) participate in employer health plans that would, sometime between Jan 1, 2012 and Jan 1, 2014, have to begin to comply with ACA regulations in terms of services covered (among other things).  Actually the time window extends to late 2014 because of the early renewal option.

Most of those plans will adjust to comply. But many will be canceled because canceling a plan is consistent with the law even while keeping an inadequate plan is not.

The dynamics of the cancellations will be interesting. Due to healthcare.gov's currently bad reputation, I expect that a significant group of employers will comply in the short run and cancel in future years when the prospect of cancellation is less traumatic for their employees. However, that approach doesn't solve the problem of financing the extra benefits in the interim ... employees will pay for that.

The extra health insurance premiums are one of the many ironies ... these employees will be paying more because of a law that was supposed to save them money.

1 comment:

Patrick Sullivan said...

The 'out of town tryout' was in Washington state in the '90s. Democrats should be really, really afraid;

http://www.washingtonpolicy.org/publications/opinion/what-washington-dc-could-learn-washington-state-health-care-reform

'The Washington Health Services Act led to rising health care costs and fewer options for consumers. These outcomes were generated by the legislation’s centralized financing and delivery of health care, including the rationing of health care, limiting consumer choices for doctors, and consumers paying for coverage they did not need or necessarily want.

'The health care issue was on the minds of Washington state voters in the 1994 general election. The state House of Representatives went from 65 Democrats and 33 Republicans to 61 Republicans and 37 Democrats. The Democratic majority in the state senate was downsized to just one seat. Post-election analysis revealed that as voters learned more about the radical health care changes made by their citizens’ legislature, the greater their opposition grew.'