Thursday, February 28, 2013

Fwd: qotd: Census report on employment-based health insurance

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-------- Original Message --------
Subject: qotd: Census report on employment-based health insurance
Date: Thu, 28 Feb 2013 10:25:33 -0800
From: Don McCanne <>
To: Quote-of-the-Day <>

United States Census Bureau
February 2012
Employment-Based Health Insurance: 2010
By Hubert Janicki
• The likelihood of employment-based coverage declined from 64.4 percent
(± 0.5) in 1997 to 56.5 percent (± 0.5) in 2010.
• In 2010, 71.1 percent (± 0.5) of employed individuals aged 15 and
older worked for an employer that offered health insurance benefits to
any of its employees.

• 42.9 percent (± 1.8) of individuals who did not complete high school
worked for an employer that offered health insurance to any of its
employees, compared with 78.9 (± 0.5) percent for individuals with a
college degree.
• Of workers aged 45 to 64, 75.7 percent (± 0.7) worked for an employer
that offered health insurance benefits, compared with 60.0 percent (±
1.4) for workers aged 19 to 25.
• Among married couples with only one member employed in a firm that
offers health insurance benefits, 68.7 (± 1.7) percent provided coverage
for the spouse.

Comment: The Affordable Care Act was designed to avoid disruption of
employer-sponsored health plans since employer plans covered the largest
number of individuals and employer contributions to their health plans
provided the largest source of health care funding in the United States.

Taking advantage of these funds that were already in place was a natural
for those writing the legislation, especially since the expansion of
Medicaid and the introduction of health exchange plans would require
additional federal funds at a time when considerable concern is being
expressed over our current government expenditures (even if the concern
should be primarily about inadequate revenues instead).

This Census Bureau report adds to the data which show that employer
offers of health care coverage continue to decline. It is uncertain what
impact the Affordable Care Act will have on this trend since employers
will face conflicting incentives for continuing coverage. It certainly
will be tempting for them to discontinue their coverage, enabling their
employees to enroll in the government subsidized exchange plans or Medicaid.

The impact of these subsidies will have to be weighed against the loss
of deductibility for employer-sponsored plans, though that theoretically
should be neutral to the employer as forgone wages for health benefits
are then paid to the employees, and it would be the employees who would
have a higher tax obligation. (Do you believe that the behavior of
employers actually would follow the common wisdom of the economists in
this matter?) Also, larger employers would have to weigh the impact of
the assessment (penalty, tax, or whatever) for not providing coverage to
their qualified employees.

There is a wide range of opinions on this matter, but it is likely that
there will be little tendency to increase the numbers of individuals
with employer-sponsored coverage. In contrast, it is more likely that
other employers will follow the lead of those who early on decide
against providing coverage as they play games with the rules that
determine whether there would be penalties or how much they would be.

Also employers will likely continue with the current trends to shift
more health care costs to their employees, with the alleged premise that
it would make them better health care shoppers. They really don't care
about their employees' shopping habits. Employers are adopting these
plans for one reason only. High deductibles and other innovations reduce
their costs - the employers' costs - for these plans, with the trade off
of increasing costs for employees who actually need health care.

It seems clear that more people will either be pushed into the
underfunded Medicaid program or the underinsurance plans of the
exchanges, or they simply will go uninsured.

The Affordable Care Act isn't fixing our system, and employers
understandably are losing their enthusiasm for filling the gaping void
in the adequacy and allocation of our inefficient private health plans.
You would think that employers would be ready to get on board with an
improved Medicare that covers everyone. It would certainly get rid of
one big headache for them.

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