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3 Years of Obamacare: Millions Lose Their Current Coverage

Posted By Alyene Senger On February 27, 2013 @ 3:30 pm In Obamacare | Comments Disabled

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Andrew Shurtleff/ZUMA Press/Newscom

Obamacare has been law for nearly three years, with its anniversary approaching on March 23. And while the major provisions (exchange subsidies and Medicaid expansion) aren’t slated to begin until 2014, Obamacare is already having devastating effects on Americans and their health care.

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Recall that fateful Presidential promise [3], made on several occasions during the health care reform debate, “If you like your health care plan, you’ll be able to keep your health care plan, period. No one will take it away, no matter what.”

Despite the President’s promise, Heritage warned that many provisions in Obamacare would encourage employers to drop health coverage [4] for their workers:

Many businesses and their employees—especially lower-income employees—will find that replacing ESI [employer-sponsored insurance] plans with subsidized coverage on the exchanges is mutually beneficial. Employers would no longer offer health insurance but would offer wage increases as wages and benefits are substitutes in an employee’s net compensation. At the same time, these workers will still have access to coverage through the exchanges with the subsidies or through Medicaid.

Heritage had it right. As employers and businesses prepare for the law’s major insurance regulations and mandates to begin next year, more stories of people losing their current coverage are emerging.

Most recently, Universal Orlando announced [5] that it will no longer offer coverage for its part-time workers. The reason is Obamacare’s prohibition of annual benefit limits beginning in 2014, causing Universal’s plans to become too expensive. It’s estimated this will affect about 500 Universal employees. But the law began phasing out annual limits over the past few years, which Universal—along with 1,230 other health plans [6]—had a waiver for. However, those waivers expire January 1, 2014, and the likely outcome will be that the nearly 4 million [6] Americans enrolled in those plans will be forced out of their current health plan.

Another group who will lose their current coverage in 2014 is the American Veterinary Medical Association (AVMA). According to a news release [7], “[M]edical coverage will end for some 17,500 Association members and thousands of their dependents at year’s end.” The underwriter of AVMA’s medical coverage blames “regulatory requirements put in place as a result of the Patient Protection and Affordable Care Act signed by President Obama in 2010.” However, the Association plans to offer other coverage by operating its own private exchange [8] in 2014.

There will likely be many more of these stories over the next few years, as the Congressional Budget Office projects that, on net, 7 million Americans will lose their ESI [9] by 2022 due to the enactment of Obamacare.

Worse yet, there are plenty of other studies that predict the loss of ESI will be much greater. McKinsey & Company [10], a consulting firm, found that “30 percent of employers will definitely or probably stop offering ESI in the years after 2014.”

Deloitte, another consulting firm, found that around 10 percent of employers would drop coverage [11] and send their employees into the new government-run exchanges.

While these results vary in severity, they all mean that Obamacare will cause millions of Americans to lose their current health care coverage—which is just one of Obamacare’s many broken promises.


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2013/02/27/3-years-of-obamacare-millions-lose-their-current-coverage/

URLs in this post:

[1] Image: http://blog.heritage.org/wp-content/uploads/ObamacareBumperSticker_1302.jpg

[2] Image: http://blog.heritage.org/wp-content/uploads/Obamacare_at_3.jpg

[3] promise: http://www.cbsnews.com/stories/2009/06/15/politics/main5090277.shtml

[4] drop health coverage: http://www.heritage.org/research/reports/2011/01/obamacare-and-health-subsidies-expanding-perverse-incentives-for-employers-and-employees

[5] announced: http://articles.orlandosentinel.com/2013-02-19/business/os-universal-part-time-insurance-20130219_1_medical-insurance-insurance-plans-universal-spokesman-tom-schroder

[6] 1,230 other health plans: http://cciio.cms.gov/resources/files/approved_applications_for_waiver.html

[7] news release: https://www.avma.org/News/JAVMANews/Pages/x130215.aspx

[8] operating its own private exchange: http://veterinarynews.dvm360.com/dvm/Veterinary%20news/AVMA-announces-platform-for-GHLIT-private-health-e/ArticleStandard/Article/detail/805411?contextCategoryId=378

[9] 7 million Americans will lose their ESI: http://www.cbo.gov/sites/default/files/cbofiles/attachments/43907-BudgetOutlook.pdf

[10] McKinsey & Company: http://www.mckinseyquarterly.com/How_US_health_care_reform_will_affect_employee_benefits_2813

[11] 10 percent of employers would drop coverage: http://blog.heritage.org/2012/07/27/what-are-the-odds-your-employer-will-drop-health-coverage/

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