Mike Kueber's Blog

January 3, 2013

ObamaCare comes to life as Frankenstein

As ObamaCare was being debated in Congress, one of President Obama’s most specious defenses of the initiative was that if you liked you current health insurance, as the vast majority of Americans did, then you would be able to keep that health insurance under ObamaCare.  That defense was specious because it was based on two false premises:

  1. It assumes that Americans purchase the type of health-insurance policy that they want.  That is not true for Americans who get their insurance policy through their employer (56% of Americans aged 26-64, according to an article in Politico).   Thus, if the employer decides to change the policy or eliminate employee health insurance, employees would not be able to keep their current policy.
  2. For those Americans who have individual health-insurance policies, it assumes that private insurance companies will continue to offer their current health-insurance policies.  That is not true because ObamaCare requires that all health-insurance policies must conform to the new mandatory coverages as prescribed by the federal government.  Thus, it is no exaggeration to say that health-insurance policies that pre-dated ObamaCare will cease to exist.

Not surprisingly, the mainstream media was complicit in this failure to question these patently false assumptions, as they seemed to go along with Pelosi’s suggestion that we need to implement the law first and then later we can we learn how it will work.  Unfortunately, the learning process may be sooner rather than later.

Just in the last few weeks, I have been hearing from multiple sources, including a senior executive for a medical-services provider, that large employers are moving quickly to drop employee health insurance and have their employees obtain ObamaCare coverage through insurance exchanges.  The ObamaCare law attempted to discourage such a movement by placing a $2,000 fine per employee on large employers who fail to offer health insurance, but large employers are apparently deciding that they would be better off paying the fine. 

If a few large employers go this route, the others will be at a competitive disadvantage if they don’t follow the same route.  And if large employers drop health insurance despite a $2,000 fine, you can imagine what small employers will do.  Employee health insurance could easily go the way of private pensions. 

If there is a mass exodus of employers from group health insurance, I suspect President Obama will want to increase the fine to $3,000 – $5,000.  Good luck with that so long as Republicans have a majority in the House or an ability to filibuster in the Senate.


1 Comment »

  1. […] in a program this big and new, and numerous tweaks will be necessary.  But as I pointed out in my blog a few weeks ago when discussing the possibility that the employer fine of $2,000 might be low enough […]

    Pingback by More problems with ObamaCare « Mike Kueber's Blog — January 25, 2013 @ 9:20 pm | Reply

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