Democrats’ Health “Reform:” Higher Costs, Less Coverage
The National Business Group on Health released a survey this morning outlining trends going into the 2011 plan benefit year. The survey of large employers, which took place in May and June of this year, shows that companies are looking for relief from the higher costs likely to hit as a result of the health law’s passage. Among the key findings:
Higher Costs
- Employers are projecting an 8.9% increase in costs for 2011—nearly two percentage points higher than the 7.0% projected for this year.
- Nearly two in three employers (63%) will require employees to pay a higher percentage of premiums in 2011 – up six points from this year (57%).
- Nearly half (46%) of employers are planning to raise out-of-pocket maximum contributions for employees in 2011 – up ten points from this year (36%).
- Employers also plan to raise in-network deductibles (44%) and out-of-network (40%) deductibles in order to control rising costs.
Less Coverage
- Nearly seven in ten (69%) employers are reviewing their retiree drug offerings as a result of the law’s new taxation of federal subsidies provided to employers who cover their former workers’ prescription benefits. As a reminder, two weeks ago the Medicare trustees report assumed that retiree drug coverage will fall from 6.6 million retirees this year to only 800,000 participants in 2016 as a result of this change.
- A majority of employers said they either are currently doing or would consider capping employer contributions toward retiree coverage, and increasing employee contributions to contain higher retiree health costs.
- Only 14% of employers offering Medicare Advantage plan coverage said they would definitely retain their plan participation going forward; the remaining 86% were still reviewing their participation, or said they would drop MA plan coverage.
One other interesting nugget from the report: Only 3% of employers said they would participate in the CLASS Act; two-thirds (67%) said they would not, while the remaining 30% were unsure at the time of the survey. Sen. Conrad famously called the CLASS Act “a Ponzi scheme of the first order, the kind of thing that Bernie Madoff would have been proud of,” in part because the only individuals likely to participate in CLASS would be those that anticipate needing the benefits. The survey data indicating low employer participation only further confirm the assessment of the CMS actuary and others that the CLASS program faces “a significant risk of failure.”
Candidate Obama famously promised to reduce family premiums by up to $2,500 “by the end of my first term as President.” But this morning’s study, like many before it, only further illustrate candidate Obama’s rhetoric from the reality of the bill President Obama signed. When will Democrats finally admit to the broken promises and destructive effects of their unpopular government takeover of health care?