Draft Regulations: Half of All Americans Will Lose Their Current Employer Coverage
A DRAFT copy of regulations relating to grandfathered plans has been circulating among downtown sources. Once finalized, the regulations will establish the circumstances under which existing plans will be required to meet all the new mandates established under health care “reform.” For this reason, the language on page 50 of the draft will be of particular interest, as it provides a mid-range estimate that more than half (51%) of all employees in 2013 will be in plans without “grandfathered” status. Under the lower-end estimate, nearly seven in ten (69%) employees – and 80% of workers in small businesses – would lose their current plan within three short years.
These draft regulations come at a time when consultants at Deloitte released a survey showing that more than four in five adults (82%) consider themselves “well” or “adequately” insured, and that virtually all of those individuals (96%) are “very satisfied” or “somewhat satisfied” with their insurance company’s performance. In other words, most Americans like the coverage they have – and the President promised that “you will not have to change plans” as a result of his health “reform.” But if these regulations are implemented, more than half of all Americans with employer coverage will be forced to change their plan, thanks to the edicts of government bureaucrats.
I’ll emphasize again that these are DRAFT documents, and the White House is apparently attempting to spin these regulations as nowhere near the final document (for understandable political reasons, given the devastating conclusions they contain). But whenever the final document is released, it will be worth examining very closely the economic assumptions if they lead to rosier estimates than those in the document below – to see whether, why, and how the Administration “massaged” the formulae to achieve a more politically acceptable number of individuals who will be able to keep their current coverage.
Under this assumption, the Departments‘ mid-range estimate is that 66 percent of small employer plans and 45 percent of large employer plans will relinquish their grandfathered status by the end of 2013. The low-end estimates are for 49 percent and 34 percent of small and large employers, respectively, to have relinquished grandfathered status, and the high-end estimates are 80 percent and 64 percent, respectively.
| Table 3 summarizes the analysis presented above.
Estimates of the Cumulative Percentage of Employees in Plans Relinquishing Their Grandfathered Status, 2011-2013 |
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| Assumption | 2011 | 2012 | 2013 |
| Upper Range Assumption | |||
| Small Employers | 20% | 36% | 49% |
| Large Employers | 13% | 24% | 34% |
| Total | 15% | 28% | 39% |
| Mid-Range Assumption | |||
| Small Employers | 30% | 51% | 66% |
| Large Employers | 18% | 33% | 45% |
| Total | 22% | 38% | 51% |
| Lower Range Assumption | |||
| Small Employers | 42% | 66% | 80% |
| Large Employers | 29% | 50% | 64% |
| Total | 33% | 55% | 69% |
| Notes: | |||
| Represents full-time employees. Small Employers = 3 to 99 employees; Large Employers = 100+ employees. | |||