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Mar 21

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ACA will force even more employers to drop health insurance

On March 13, 2012, in connection with the President’s budget proposals, the Congressional Budget Office (CBO) and the Congressional Joint Committee on Taxation (JCT) revised estimates of the impact of the Affordable Care Act (ACA – aka ObamaCare). One of the key questions is how many employers will give up on providing health care insurance to their employees because of ACA’s requirements. These employees will be moved to the public system under the mandate that these persons purchase insurance from the state-run health insurance exchanges.  The CBO states:

In the original analysis of the impact of the legislation, CBO and JCT estimated that, on balance, the number of people obtaining coverage through their employer would be about 3 million lower in 2019 under the legislation than under prior law. As reflected in CBO’s latest baseline projections, the two agencies now anticipate that, because of the ACA, about 3 million to 5 million fewer people, on net, will obtain coverage through their employer each year from 2019 through 2022 than would have been the case under prior law.”

Because of admitted uncertainty in these estimates, the CBO report provides four alternative scenarios. On balance, the scenarios indicate that the possibility of a larger number of persons with lost employer coverage is even greater, as follows:

In the four alternative scenarios examined, the ACA changes the number of people who will obtain health insurance coverage through their employer in 2019 by an amount that ranges from a reduction of 20 million to a gain of 3 million relative to what would have occurred otherwise.”

All of these estimates are actually way too low. In this article, we explain that combined, two studies by reputable consulting firms predict the near collapse of employer-provided health coverage under ObamaCare.

Those who will be no longer be offered insurance through their employment may need to change their health care providers as part of their move to the public system. Of course, ACA’s proponents said that this would not happen. For this reason, the revised estimates by the CBO and JCT are quite disappointing.

About the author

David Nolte

I am a founding principal of Fulcrum Inquiry, an accounting and economic consulting firm that performs damage analysis for commercial litigation, forensic accountings, financial investigations, and business valuations. I am a Certified Public Accountant (CPA) and an Accredited Senior Appraiser (ASA), as well as having other professional credentials. I regularly serve as an expert witness involving damages measurement. My litigation-oriented resume is on Fulcrum's website.

Permanent link to this article: http://betweenthenumbers.net/2012/03/aca-will-force-even-more-employers-to-drop-health-insurance/

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