The health insurance exchanges look like they are going to make healthcare more expensive because of 20,000 new regulations. Employers are looking for ways to avoid Obamacare and get out of the healthcare coverage business.
Employers are realizing they can avoid certain penalties under Obamacare by offering very limited plans that lack key benefits which satisfy the true definition of healthcare insurance.
Benefits advisers and insurance brokers are increasing their commissions by offering low benefit plans that cover minimum benefits such as preventive services. The healthcare plans provide just enough minimum benefit requirements to avoid Obamacare’s penalty. If an employee wants real coverage he is on his own.
Obamacare’s promise was that healthcare insurance coverage would broadly enrich at lower affordable costs.
It is unclear how many employers will adopt the strategy this year. There are dozens of brokers and benefit administrators discussing this strategy with their clients. I bet many will adopt this strategy.
"There had to be a way out" of the penalty for employers with low-wage workers, said Todd Dorton, a consultant and broker for Gallagher Benefit Services Inc., a unit of Arthur J. Gallagher AJG -0.44% & Co., who has enrolled several employers in the limited plans.”
Obamacare requires employers with 50 or more workers to offer coverage to their workers or pay a 2,000 per worker penalty.
The employers and benefits experts initially thought the rules required robust insurance with a long list of "essential" benefits.
Federal officials confirm the mandates affect only plans “sponsored by insurers” that are sold to small businesses and individuals.
Healthcare insurance “sponsored by insurers” that are sold to small businesses and individuals affect only about 30 million of the more than 160 million people with private insurance.
Employers provide these “insurer sponsored plans” to 19 million out of the 30 million people. These plans are going to disappear.
Some benefits advisers feel they face regulatory uncertainty. New regulation can cancel older regulations. These advisors say they would adjust to new regulations as regulators clarify the law.
According to Obamacare, regulations written by the multiple new agencies, larger employers with more than 50 workers only have to provide preventive services, without a lifetime or annual dollar-value limit, in order to avoid the across-the-workforce penalty.
Such policies would generally cost far less to provide to employees than paying the penalty or providing more comprehensive benefits.
Most low-benefit plans would cost employers between $40 and $100 monthly per employee, according to benefit firms' estimates.
These plans essentially provide no insurance for healthcare problems if someone needs insurance. The financial burden falls directly on the consumer.
Obama administration officials confirmed in interviews that the low benefit plans would be sufficient to avoid the across-the-workforce penalty.
Several Obama administration officials expressed surprise that employers would consider the low benefit 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."
Another trick benefit managers are offering small employers in order for them to avoid higher costs of premiums due to compliance with some of the provisions in Obamacare is early yearly renewal of preexisting healthcare coverage. UnitedHealth, Aetna and Humana are offering small companies this option. The savings is significant.
Self-insured companies face fewer changes under Obamacare. Many small companies are now switching to self-insurance. Large corporations have been self-insured for years.
I have previously discussed the large trend to hire only part time employees to avoid the penalty as well as the requirement to provide insurance.
Many employers are trying to get out of providing healthcare insurance to employees. Employers fear they will be penalized by the Obama administration at a later time. The administration is constantly changing regulations. This has lead to tremendous uncertainty.
Some Obama administration regulators worry that some of these strategies will be widely adopted. If this happens it could decrease the effectiveness of Obamacare’s online health-insurance exchanges.
Only older and sicker workers, who need real healthcare insurance coverage will opt out of low benefit employer coverage and join the health insurance exchanges.
The premium cost for good coverage in Obamacare’s health insurance exchanges is high already. The adverse selection will drive these costs even higher.
The whole idea behind Obamacare’s health insurance exchanges is to force healthy people to pay for the resources used by sick people. (“Redistribution of wealth”)
The Obama administration refuses to believe options to avoid Obamacare will be a widespread trend.
How come? Didn’t congress exempt itself from Obamacare?
"Any activities that take place on the margins by a small number of employers would not have a significant impact on the small group or the individual market," said Mike Hash, director of the department's Office of Health Reform.”
These new plans are a substitute for the Obamacare exempt Minimed plans. Companies that provided Minimed plans received over 13,000 waivers for Obamacare until January 2014. Companies such as McDonald and Burger King provided Minimed Plans to employees.
All of these twists and turns make Obamacare look like it is unworkable. It is!
President Obama’s goal is to create more chaos and dysfunction in the healthcare system.
Only then can the government really step in and say let me help you.
Then the government can provide a single party payer system and complete the journey to socialized medicine.
Based on past experience in many other countries, the result will be skyrocketing costs and increased deficits.
Americans have a lot to look forward to. The only was out is to repeal Obamacare and replace it with a consumer driven healthcare system.
The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone
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