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Employers might dump insurance
Dr. Jim Spears speaks with Sarah Ittner, a New York-based actor who does not have health coverage, at the Actors Fund's Al Hirschfeld Free Health Clinic on March 23, 2011 in New York City.
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Tess Vigeland: It's been more than a year since the big health care reform law passed. And we're still asking: What will it mean? Especially for those who have insurance through their employers.
Well a new report out from McKinsey & Co. found it may mean a whole lot of us won't be offered insurance at our jobs anymore. Thirty percent of employers said they probably would stop offering workers health insurance after 2014. That's when the bulk of the law takes effect, including the option of state-run insurance exchanges.
From our health desk at WHYY in Philadelphia, Gregory Warner reports.
Gregory Warner: If it were just a question of the bottom line, Mark Kallenback would drop coverage for his workers in a heartbeat. He runs a housing management company in Portland, Ore. He's got 350 employees. In 2014, he figures he could send those workers to buy their own coverage through Oregon's new insurance exchange. He'd pay a $2000 penalty per worker and still have lots of cash left over.
Mark Kallenback: Would we do it if it wasn't in our employees' interest and only in our own? That would be a very, very tough decision.
Because Kallenback has grown up in a world where employers have to offer health plans to attract the best workers. Bob Atlas of Avalere Health says that calculus could shift.
Bob Atlas: Employers of low wage workers who already don't offer generous benefits might start to move first.
This could create a cascade effect: with more businesses offering to raise wages while sending employees to the exchanges for coverage.
Atlas: In fact, some folks say the exchanges will offer more choice than what an employer can offer. Premiums might actually go down.
The research firm McKinsey found that 30 percent of employers may drop coverage after 2014. But other analysts say that employer coverage will stay flat or increase. Steve King of Emergent Research says that employer behavior is so hard to predict, in part because no one knows if the exchanges will work.
Steve King: Most employers are not going to want to send their employees into lousy health care coverage.
Which brings us back to Kallenback, the Oregon businessowner we heard from up top. He'd be happy to stop paying the costs of health care, just so long as his employees don't stop wanting to work for him.
In Philadelphia, I'm Gregory Warner for Marketplace.
I am one of the founding principal of Cascade Management and the interviewee quoted above.
To clarify Cascade Management believes strongly in providing health care benefits to its employees; and has worked very hard to so in an environment of escalating cost which more than double our health care premiums in the past 7 years.
Cost have risen faster than the general economy by 2.5 or even 3 times. And has place a great squeeze on small business. With both the employer and the employee suffering the cost of the increase.
Should we have a chance to significantly lower our health insurance cost we would do so, but only after making sure our employees were also taken care of, with equal or better coverage.
A positive if health insurance cost actually go down is the opportunity to address pent up wage pressures and actually be able to assist our employees in catching up with the economy where cost increases (inflation) have out strip their wage increases.
We have done our best to balance all the forces and see our employees who are most valuable resource are fairly compensated.
Mark S. Kellenbeck
Founding Principle and COO
Cascade Management
Isn't this inevitable? It's only a matter of time, before the companies that haven't already stop providing healthcare wise up and stop all benefits. After all, providing perks to all those full-time temporary employees has an adverse affect on the bottom line and might put a dent in all those million dollar bonuses for management.
The law requires employers to provide unreasonably generous health insurance, or pay a comparatively trivial fine. When push comes to shove, of *course* they'll pay the fine rather than paying for insurance they can't afford. This is not news; any economist who didn't treat far-Left propaganda as indisputable fact has been warning about this since the contents of the bill became public.
This story is a rehash of bogus assumptions and false choices put forward by the opponents of health care reform during the debate over the Affordable Care Act. Employers do not have to offer benefits like health insurance. They do so because it is the right thing to do and to attract and retain the best and brightest. We cover our full-time employees and their families and their average tenure with us is 18 years. Employees don't want to be forced to have to deal with insurance companies any more than senior citizens do. (And we know how popular the Republican plan that replaces Medicare with insurance vouchers has proven to be.) A few employers may forget why employee benefits are important to their businesses, most will not.
ALL employers would dump their employees from insurance if given 1/2 a chance. The oft-notion that "employees are our greatest" asset is challenged whenever an article like this is broadcast. Employers have a totally selfish reason for offering insurance: they can treat their employees like indentured servants...afraid that they will lose "benefits." By the way, you'll never hear an employer say he/she will raise wages if the insurance costs went away.
This story sounds like bad news for employees for two reasons: first, not only would it "publicize" private insurance offered by employers, but would also shift the research burden onto employees for their own coverage(s) - which most are not qualified to do, and secondly; wide-scale insurance outsourcing would virtually end the profession of human resource benefits coordinator.
