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Companies looking to drop employer-sponsored health insurance?
CNN has attained internal documents that reveal big companies like AT&T, Deere, and Verizon debated whether to dump "the health care coverage they provide to their workers in exchange for paying penalty fees to the government."
Is this the unintended consequence of the new health care legislation: companies saving money by opting to pay government penalties, rather than continuing to insure employees?
Although Congress first requested the companies' documents, at no point did the government reveal that companies were deliberating dropping coverage. But deliberate they did.
At&T, for example, produced a PowerPoint presentation: "Medical Cost Versus No Coverage Penalty." It found that its health care cost would fall from $2.4 billion a year to $600 million if it stopped providing health insurance to its employees, and paid the penalty instead.
Although companies like Verizon are now denying they're even contemplating that course of action, records show otherwise. And what would the collapse of employer-sponsored health care mean for health care reform?
Only time will tell, but it's probably not what President Obama had in mind.
This outcome may have been unintended, but you hardly needed a Ph.D. to foresee it.
"The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups." — Henry Hazlitt, <i>Economics in One Lesson</i>
In any event, wasn't the objective here to decouple health care benefits from employment? Then why do employers need to continue to provide health benefits?
