Skip to main content

Will Employers Eliminate Health Coverage In 2014?

'Yes' says the smart money.   From AIS's Health Reform Week;
"Health insurance reform mandates already in effect are having a major cost impact on midsized employers across the U.S., according to a new actuarial modeling analysis by Lockton Benefit Group. On average, employers with 2,000 to 10,000 employees tacked another 2.5% onto their health insurance costs since mandates went into effect last September — primarily due to reform requirements extending dependent coverage to age 26 and eliminating lifetime and raising annual coverage limits, the firm says. Moreover, costs related to these mandates are just the tip of the iceberg — to the point where many employers could consider termination of their plans in 2014."

[...]

"Employers deciding to eliminate health plan coverage in 2014 will save an average of about 44% off their current health care spending, according to Lockton’s actuarial modeling. Thus, an employer spending $10 million today would spend $4.4 million to jettison its plan and pay the relatively smaller financial penalty, Fensholt explains. He notes that the employer doesn’t save the entire $10 million because of the penalty, which is nondeductible, as well as the lost tax deduction on its current spending, and lost Social Security tax savings on employee pretax premium contributions.
More:

Two Views Of the Future Of Employer Sponsored Coverage.  Booz&Co calls the demise of employer-sponsored coverage "greatly exaggerated."  They're wrong.

What would happen if employers walked away from health coverage? Kaiser Health News calls it "..a bailout of epic proportions."  I'll take that bet.


Labels:

Comments

Post a Comment

Popular posts from this blog

Michael Porter On Health Care Reform

Michael Porter, writing in the New England Journal of Medicine, proposes "A Strategy For Health Care Reform - Toward A Value-Based System." His proposals are fundamental, lucid and right-on, meaning they're sure to be opposed by some parties to the debate, the so-called "Yes, but..." crowd. Most important, in my opinion, is this: "... electronic medical records will enable value improvement, but only if they support integrated care and outcome measurement. Simply automating current delivery practices will be a hugely expensive exercise in futility. Among our highest near-term priorities is to finalize and then continuously update health information technology (HIT) standards that include precise data definitions (for diagnoses and treatments, for example), an architecture for aggregating data for each patient over time and across providers, and protocols for seamless communication among systems. "Finally, consumers must become much mor
Post a Comment
Read more

Being Disrupted Ain't Fun. Deal With It.

Articles about disrupting healthcare, particularly those analogizing, say, Tesla's example with healthcare's current state, are frequently met with a chorus of (paraphrasing here) "Irrelevant! Cars are easy, healthcare is hard." You know, patients and doctors as examples of "information asymmetry" and all that. Well, let me ask you this: assuming you drive a car with a traditional internal combustion engine, how much do you know about the metallurgy in your car's engine block? I'll bet the answer is: virtually nothing. In fact it's probably less than you know about your own body's GI tract. Yet somehow, every day, us (allegedly) ignorant people buy and drive cars without help from a cadre of experts. Most of us do so and live happily ever after (at least until the warranty expires. Warranties...another thing healthcare could learn from Tesla.) Now, us free range dummies - impatient with information asymmetry - are storming healthcare
Post a Comment
Read more

My Take On Anthem-Cigna, Big Dumb Companies and the Executives Who Run Them

After last Friday's Appeals Court decision, Anthem's hostile takeover of, er, merger with Cigna has but a faint pulse. Good. Unplug the respirator. Cigna's figured it out but Anthem is like that late-late horror show where the corpse refuses to die. Meanwhile, 150 McKinsey consultants are on standby for post-merger "integration" support. I guess "no deal, no paycheck..." is powerfully motivating to keep the patient alive a while longer. In court, Anthem argued that assembling a $54 billion behemoth is a necessary precondition to sparking all manner of wondrous innovations and delivering $2.4 billion in efficiencies. The basic argument appears to be "We need to double in size to grow a brain. And just imagine all those savings translating directly into lower premiums for employers and consumers."  Stop. Read that paragraph again. Ignore the dubious "lower premiums" argument and focus on the deal's savings. $2.4 billion saved
Post a Comment
Read more