by Michael Cannon, CATO Institute
ObamaCare supporters promised the law’s employer mandate would require employers to provide workers with comprehensive insurance. But they apparently didn’t read the bill very closely. It’s a recurring theme.
According to the Wall Street Journal, employers and employee-benefits consultants have found, and federal regulators now confirm, that the law actually requires most employers to offer no more than very flimsy coverage. Many employers are now exploring the option of offering limited-benefit health plans that cover preventive services and maybe “$100 a day for a hospital visit” but “wouldn’t cover surgery, X-rays or prenatal care.” Indeed, the law could push many employers to reduce the amount of coverage workers receive on the job.
The Obama administration’s reaction demonstrates they had no idea what they were doing. The Wall Street Journal:
Administration officials confirmed in interviews that the skinny plans, in concept, would be sufficient to avoid the across-the-workforce penalty. Several expressed surprise that employers would consider the approach.
“We wouldn’t have anticipated that there’d be demand for these types of band-aid plans in 2014,” said Robert Kocher, a former White House health adviser who helped shepherd the law. “Our expectation was that employers would offer high quality insurance.”
The Law of Unintended Consequences strikes again.
This and other employer responses to the law could make the roll-out of ObamaCare’s health insurance “exchanges” even more of a train wreck.
-To the extent ObamaCare’s employer mandate pushes firms to offer bare-bones plans, premiums for plans offered through Exchanges will rise. The healthiest workers will enroll in their employers’ bare-bones plans, but workers who have expensive illnesses (or with dependents who have expensive illnesses) will seek more-comprehensive coverage through the Exchanges. The influx of sick consumers will increase the premiums for Exchange-based plans. Many of these sick workers won’t receive any premium-assistance tax credits or cost-sharing subsidies because their employer’s bare-bones plan will likely satisfy ObamaCare’s definition of adequate – and because the statute forbids those entitlements in the 33 states that have declined to establish an Exchange.Details