inna's Journal - One HUGE but rarely mentioned problem with HCR - Erosion of employer-based coverage

inna's Journal - One HUGE but rarely mentioned problem with HCR - Erosion of employer-based coverage

Posted by inna in General Discussion
Wed Mar 17th 2010, 05:50 AM
This issue gets little coverage, but it's critically important.

One of the biggest and often overlooked problems with the Senate Bill (which is likely to be the basis of any future legislation) is that, while strengthening and enshrining the parasitic for-profit insurance industry, it will also result in

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weakening/eroding employer-sponsored coverage and shifting financial burden to individuals/families
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Some points to consider:

1) All analyses indicate that employer-based health insurance system is increasingly unsustainable, especially in the current economic climate. As shocking as it may sound, the average annual family premium for employer-sponsored health insurance was $13,375 in 2009, while costs continue to skyrocket.

2) Strong individual mandate vs. weak/nonexistent employer mandate in the Senate Bill: in effect, this will STRONGLY encourage employers to drop coverage:

Employers who fail to provide any coverage for their employees will only have to pay a puny $2,000 per employee in penalty (for failing to provide health insurance) - and that only applies to employers with >50 employees and excludes the first 30 employees over 50, as an additional perk. Employers with less than 50 employees are exempt from any penalties for failing to provide insurance, altogether.

In other words, the maximum penalty for failing to provide coverage is $2,000 (or ZERO penalty for small businesses).

A $1,000,000 question: In this economy, would struggling businesses rather pay $13,375 (and skyrocketing) for health insurance premiums per employee or a $2,000 penalty (per employee) for failing to provide coverage (especially since now the employees will be mandated to buy their own insurance via Exchanges)? (And remember, it's not as if employers have to entice the potential employees with benefits these days; unfortunately, in this kind of economy, benefits are disposable; people are desperate for any kind of job, with or without benefits).
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