More on Employers Dropping Coverage
Yet another consulting firm has released a survey regarding employers dropping coverage. In this case, Towers Watson’s annual survey of retiree health coverage found that nearly three in five employers who offer coverage to retirees under age 65 are assessing new alternatives in light of the law. Nearly nine in ten (87%) of employers responded that the new insurance options available under the law are influencing their strategy for offering benefits to retirees. Last week’s Associated Press story about how early retirees making as much as $64,000 can receive “nearly free” health care courtesy of federal taxpayers will only further encourage these firms to drop coverage for their former workers.
Meanwhile, Bloomberg Government ran a story Friday about how “employers may prefer paying fines” to offering coverage. The article indicated that “business groups are dubious” of economic models claiming firms will not drop coverage, “and say the more negative findings” of McKinsey’s health survey “provide a better indication” of employer responses. Among the reactions in the piece:
- The National Retail Federation said it is “not bullish on the future of health care coverage in the private sector;”
- A representative of the Employee Benefit Research Institute said that “even if companies don’t drop their health plans entirely, ‘a significant number’ are looking at alternative arrangements” – which could involve reorganizing their firms so that low-wage workers receive government subsidies in Exchanges, while keeping employer-provided insurance for high-income workers; and
- A representative from America’s Health Insurance Plans noted that “almost all employers are taking a look at their health care strategy…many will keep their options open, and if their competition drops, they will too.”
A June Gallup poll found nearly 10 million adults have lost employer-based coverage since President Obama was elected President. These latest surveys once again confirm that, thanks to Democrats’ unpopular health care law, millions more Americans are about to follow suit.